Jihan Wu’s company will raise additional capital to buy bitcoin miners, which are now on sale at a discount.
It was learned that Bitdeer Technologies Holdings of Jihan Wu, the former head of Bitmain, the largest producer of mining equipment in the world, is now planning to raise additional capital of $ 200 million in order to make large-scale purchases of mining equipment, which is now largely sold at a discount. As a reminder, Bitmain itself has become sell some types of new bitcoin miners at a discount.
In all, Bitdeer Technologies Holdings plans to invest a quarter of a billion dollars in mining equipment. The company is currently already mining bitcoins at sites in the U.S. and Norway.
The decision to invest in mining equipment is a strategic one and is focused on the fact that on the horizon of several years, the price of bitcoin will not just go up, but will renew a historical high. That said, halving in 2024, when there will be another reduction in the reward per block in the bitcoin blockchain, will be one of the fundamental drivers of a positive market environment.
Bitcoin miners entered the market at a discount due to the fact that in 2021, when the price of bitcoin reached an all-time high in excess of $63,000, a not insignificant number of miners contracted to buy additional machines. In a situation of high demand and difficulties in global logistics due to the COVID-19 pandemic, such contracts often meant that it took only six months to deliver such equipment.
However, during that considerable period of time, the situation in the bitcoin market changed: the price of the cryptocurrency number one went down, the profitability margin of bitcoin mining also began to decrease, which eventually led to the fact that some companies now prefer to sell the mining equipment at a discount than to start operating it.
At the same time, some participants in the mining market on the contrary investing into mining equipment, and Bitdeer Technologies Holdings was one of those companies. In her case, the scale of investment is noteworthy, as well as a certain social mission, which is that with their purchases the company will help some miners to wait out the “cryptozyma.”
Bitdeer Technologies Holdings, on the other hand, has several options on how to take advantage of the equipment it purchases: either run it directly into mining, or wait until it rises in value and sell it at a profit. Both options focus on whether or not the bitcoin price will eventually show a significant increase.
To execute its strategy, Bitdeer Technologies Holdings purchased a storage facility in Singapore a week earlier called Le Freeport for equipment.