In a bold strategic pivot, Tether, the name behind the world’s largest US dollar stablecoin, is setting its sights on the lucrative world of bitcoin mining. According to a recent Bloomberg report, the company is planning a whopping $500 million investment to carve out a significant presence in this competitive arena.
Paolo Ardoino, Tether’s incoming CEO, revealed in an interview with Bloomberg that the company is not just dipping its toes in the water. Over the next six months, Tether intends to construct its own mining facilities and acquire stakes in existing firms, signaling a serious commitment to becoming a major player in the Bitcoin mining ecosystem.
Tether’s bread and butter has been the USDT stablecoin, pegged one-to-one with the dollar. The company’s revenue streams primarily flow from managing its multi-billion dollar reserves, which boasted about $3.2 billion in excess cash as of September.
Ardoino disclosed plans for Tether to establish Bitcoin mines in El Salvador, Uruguay, and Paraguay. The ambitious goal? To capture 1% of the total computing power dedicated to running the Bitcoin network. By the end of 2023, Tether aims to hit 120 megawatts in its operations, scaling up to 450 megawatts by 2025.
This foray into mining puts Tether in the ring with industry heavyweights like Marathon Digital Holdings, currently contributing around 4% to Bitcoin mining. With the bitcoin mining sector grappling with cash flow and liquidity challenges, Tether’s financial muscle could disrupt the market dynamics, positioning it as a formidable competitor.
However, the path to mining dominance isn’t without obstacles. Stiff competition and potential impacts on mining revenue from next year’s bitcoin halving event pose significant challenges.
Ardoino emphasized a measured approach, “Mining for us is something that we have to learn and grow over time,” he said. “We are not in a rush to become the biggest miner in the world.”
As Bitcoin continues its impressive 2023 run, hovering around $36,570, Tether’s venture into mining marks an intriguing development in the crypto landscape. For investors and crypto enthusiasts, this move highlights the evolving strategies of major players in the digital currency space and underscores the potential for established companies to pivot into new, high-growth areas.