Singapore-based cryptocurrency mining company Bitdeer Technologies Group has revealed plans to raise $150 million through a public offering of convertible notes set to mature in 2029.
The funds are earmarked for expanding its data centers and advancing the development of ASIC-based mining rigs, the firm said in a Thursday press release.
The proposed notes will be senior unsecured obligations of Bitdeer, meaning they will take precedence over other debts should the company face financial difficulties.
Investors Can Receive Cash and Shares
Investors in Bitdeer’s proposed notes will have the option to convert their holdings into equity in the form of Bitdeer’s Class A ordinary shares or receive a combination of cash and shares.
The company has set the annual interest rate on the notes at 8.5%, offering investors a steady return until the notes mature or are converted, redeemed, or repurchased.
Bitdeer, currently ranked as the 11th largest crypto mining firm by market capitalization, is valued at approximately $870 million, according to data from CompaniesMarketCap.
The company outperforms competitors such as BitFufu and Bit Digital in market standing.
Despite this, news of the convertible notes offering had an immediate negative impact on Bitdeer’s stock price, which fell by over 18% following the announcement.
In a broader 5-day trend, the stock has dropped by 23%, from $8.26 on August 9 to $6.33 as of August 16, according to Google Finance.
Bitdeer’s move mirrors a similar offering from another crypto mining firm, Core Scientific, which saw its stock price drop by 10% after announcing a $400 million senior convertible notes offering on August 14.
Bitcoin Miners Face ‘Capitulation’
It is worth noting that Bitcoin miners are facing a critical phase known as “capitulation” as their profits diminish amidst the recent sell-off in the Bitcoin market.
Miner capitulation occurs when miners reduce their operations or sell a portion of their mined Bitcoin and reserves to sustain their operations, earn yield, or hedge their Bitcoin exposure.
One significant indicator of capitulation is the decline in Bitcoin’s hashrate, which represents the total computational power securing the Bitcoin network.
Meanwhile, Bitcoin miners are emerging as attractive partners for the construction of artificial intelligence (AI) data centers, benefiting from their available power supplies and operational capabilities.
In a research report, broker Bernstein said recent AI deals, such as Core Scientific’s 12-year agreement with CoreWeave and Coatue Management’s $150 million investment in Hut 8, act as significant catalysts for the sector.
Bernstein initiated coverage of miner Iris Energy with an outperform rating and a $26 price target.
Additionally, the broker initiated coverage of Core Scientific with an outperform rating and a $17 objective.
Bitcoin miners have secured substantial power supplies, currently controlling around 6 gigawatts (GW) of power access, with a projected pipeline of up to 12 GW by 2027.
The power capacity allows miners to occupy a favorable position in the “large load power interconnect queue,” enabling potential partners to save time in securing energy supplies.
The analysts at Bernstein note that Bitcoin data centers are well-suited for retrofitting due to their high power density racks, robust cooling infrastructure, and general operating capabilities.
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