Tether, the stablecoin issuing company, has announced plans to allocate approximately $500 million for a strategic expansion into Bitcoin mining over the next six months. This strategy marks a significant departure from its primary activity, which is the management of USDT.
Tether’s investment plan includes the construction of new mining facilities and the acquisition of stakes in existing mining entities. To support this initiative, it has a $610 million credit facility, previously extended to the Bitcoin mining company Northern Data AG, whose shares were acquired by Tether last September.
Paolo Ardoino, poised to take over the helm at the company, emphasized the company’s unwavering commitment to this foray into Bitcoin mining, underscoring the seriousness with which they approach the construction of new substations and mining sites.
Potential Investment Areas For Tether
Tether’s expansion strategy goes beyond financial investment; it also involves geographical diversification with plans for new facilities in Uruguay, Paraguay, and El Salvador. Each of these sites is projected to have a substantial capacity of between 40 and 70 megawatts, highlighting the magnitude of Tether’s aspirations.
Ardoino and his team aim to secure 1% of the total computing power driving the Bitcoin network. Although a specific timeline is not specified to achieve this goal, attaining it would position Tether among the top 20 Bitcoin mining companies globally.
Tether intends to reach a capacity of 120 megawatts in its proprietary mining operations by the end of 2023, with an even more ambitious projection to scale up to 450 megawatts by the close of 2025.
The company boasts a robust financial arsenal, supported by profits derived from managing US Treasury bonds and other assets, accumulating approximately $3.2 billion in excess cash until September 30th.
Despite facing challenges such as increasing competition and the impending Bitcoin code update known as the halving, the business demonstrates resilience and adaptability. They evaluate potential sites with capacities of 300 megawatts while maintaining profitability due to Bitcoin’s upward price trajectory.
Paolo Ardoino emphasizes a pragmatic approach, stating:
“Mining for us is something that we have to learn and develop over time. We are not in a rush to become the world’s largest mining company.”