Singapore-based cryptocurrency mining company Bitdeer Technologies Group has unveiled plans to raise $150 million through a public offering of convertible bonds due in 2029.
The company said in a Thursday press release that the funds will be used to expand data centers and develop ASIC-based mining platforms. The proposed bonds will be Bitdeer’s senior unsecured obligations, meaningthey will take precedence over other debt if the company finds itself in financial distress.
Investors in Bitdeer’s proposed bonds will have the option of converting their holdings into equity in the form of Bitdeer’s ordinary Class A shares, or receiving a combination of cash and stock. The company has set the bonds’ annual interest rate at 8.5%, offering investors a fixed return until the bonds expire or are converted, redeemed or repurchased.
Bitdeer, currently ranked as the 11th largest cryptocurrency mining company by market capitalization, is valued at about $870 million, according to CompaniesMarketCap data .
The company outperforms competitors such as BitFufu and Bit Digital in terms of market position. Despite this, the news of the convertible bond offering had an immediate negative impact on Bitdeer’s stock price, which fell more than 18% after the announcement.
In a broader 5-day trend, the stock fell 23%, from $8.26 on August 9 to $6.33 on August 16, according to Google Finance data .
Bitdeer’s move mirrors a similar bid by another cryptocurrency mining company, Core Scientific, whose share price fell 10% after it announced a $400 million convertible bond offering on August 14.
It is worth noting that mining companies are facing a critical phase known as “capitulation,” as their profits are declining in the face of the recent bitcoin market sell-off.
Miner capitulation occurs when miners reduce their operations or sell some of their mined bitcoin and reserves in order to maintain their operations, earn income or hedge their bitcoin exposure.
One significant indicator of capitulation is the decline in bitcoin’s hashrate, which represents the total computing power securing the bitcoin network. Meanwhile, bitcoin miners are becoming attractive partners in building artificial intelligence (AI) data centers, taking advantage of available power sources and operational capabilities.
In a research report, broker Bernstein said that recent AI deals, such as Core Scientific’s 12-year deal with CoreWeave and Coatue Management ‘s $150 million investment in Hut 8, are acting as significant catalysts for the sector.
Berstein initiated an analysis of miner Iris Energy with an outperform rating and $26 price target. In addition, the broker initiated an analysis of Core Scientific with an outperform rating and a target price of $17. Bitcoin miners have secured significant power sources, currently controlling about 6 gigawatts (GW) of energy access, with a projected potential of up to 12 GW by 2027.
The power supply power allows miners to occupy an advantageous position in the “heavy-duty connection queue,” enabling potential partners to save time in securing energy supplies.
Analysts at Bernstein note that Bitcoin’s data centers are well suited for upgrades due to their high-density power racks, robust cooling infrastructure and overall operational capabilities.
