The Bitdeer mining-services provider, led by former Bitmain CEO Jihan Wu, will launch a $250 million fund to buy assets from distressed companies in the industry. Bloomberg reports.
Bitdeer Technologies Holding Co will earmark $50 million as a junior tranche and absorb all losses of the structure if the venture fails to succeed. Partners — unnamed family offices, venture firms, alternative investment funds and mining companies — will provide the remaining $200 million.
“There are opportunities in every cycle. If you can pinpoint the exact moment — enter in the down phase, and exit in the up phase — then you’ll make money. This works especially well for mining,” — said Bitdeer CEO Matt Kong.
The revenues of bitcoin miners remain near two-year lows on the backdrop of weakening demand, rising energy costs and intensifying competition.
A deteriorating operating environment has created the conditions for mergers and acquisitions. Bloomberg cited CleanSpark’s purchase of an operating bitcoin mining facility from WAHA Technologies for $16.2 million.
“We can buy cheaper equipment and run it on our facilities with stable and cost-effective power purchase agreements,” — Kong explained.
Earlier, in January 2021 Wu left Bitmain, receiving $600 million in severance, the BTC.com mining pool and Bitdeer. Later he sold BTC.com to online lottery services provider 500.com Limited.
In the autumn of the same year Bitdeer announced a merger with a SPAC-firm Blue Safari Group Acquisition Corp.
In September 2022 Bloomberg learned of the purchase of Le Freeport storage firm for $28 million.
Earlier, the mining company and provider of cloud-based cryptocurrency mining infrastructure Compute North filed for bankruptcy.
According to Arcane Research, the overwhelming majority of publicly traded mining companies posted undistributed losses on their balance sheets, despite a strong 2021.