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Bitdeer, a Crypto Mining Platform Founded by a Chinese Crypto Tycoon, Has Launched a Fund to Help Distressed Miners

Chinese crypto billionaire Jihan Wu is setting up a $250 million fund to buy distressed assets from Bitcoin miners. The industry is reeling from this year's steep drop in digital-asset prices, and Wu's fund will provide much-needed relief for struggling miners.

September 27, 2022
5 minutes
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Chinese crypto billionaire Jihan Wu is setting up a $250 million fund to buy distressed assets from Bitcoin miners. The industry is reeling from this year's steep drop in digital-asset prices, and Wu's fund will provide much-needed relief for struggling miners. With this infusion of capital, miners will be able to stay afloat and continue to play a vital role in the Bitcoin ecosystem.

Bitdeer Technologies Holding Co. plans to invest $50 million in a junior tranche of a new fund, meaning that its investment will be at risk if the fund loses money. The company is aiming to raise another $200 million from outside investors, including family offices, venture capital firms, alternative investment funds, and other mining companies.

As depressed token prices, high energy costs and fierce competition take their toll on Bitcoin miners, a closely watched gauge of mining-industry revenue has fallen to a two-year low. Compute North, a major data-center provider for crypto mining, filed for bankruptcy last week, while the three largest US publicly traded Bitcoin miners suffered combined losses of more than $1 billion in the second quarter alone.

According to Matt Kong, CEO of Bitdeer, there are opportunities to make money in every market cycle. He advises timing your entry into the market so that you can buy low and sell high. This strategy is especially effective in the mining industry.

As the mining industry struggles, miners with a lot of debt are selling their assets, like mining rigs, at a big discount to miners who have more money. The price of some types of mining machines has gone down by more than 50%. For example, Bitcoin miner CleanSpark Inc. bought a mining facility in Georgia and thousands of rigs from another miner, Mawson Infrastructure Group Inc.

According to Bitdeer's Kong, buying cheaper machines and running them in existing facilities with stable and cost-effective power purchase agreements is a cash flow positive move.

Wu co-founded Bitmain Technologies Ltd, the largest Bitcoin mining-machine manufacturer, which generated $5.6 billion in revenue last year. He exited the Beijing-based company in January 2021 and now controls Bitmain's Bitcoin-mining spinoff Bitdeer and crypto-finance venture firm Matrixport, which has more than $10 billion of client assets under management and custody.

Bitdeer, a Singapore-based Bitcoin miner, has emerged as a major player in the industry, with facilities across the US and Norway. Last November, the firm filed with the US Securities and Exchange Commission to go public through a $4 billion “blank-check” SPAC agreement. The deal was originally set to be completed on June 14, but has since been pushed back, with Bitdeer filing for a second extension that would delay the closing until Dec. 14.

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