Bitdeer Technologies Group, the Nasdaq-listed crypto mining firm founded by industry veteran Jihan Wu, is shifting its strategy from hardware supplier to major Bitcoin miner as demand for mining rigs weakens.
In a move that signals both confidence and necessity, the company has quadrupled its proprietary mining capacity over the past year and now aims to rank among the top five global miners by computing power.
The pivot comes amid a slowdown in global demand for mining equipment. Data shows that the largest mining companies, most of them in the United States, have pulled back on new purchases, wary of overextending as network difficulty hits record highs.
“I expect large miners to remain cautious on fleet expansion for the foreseeable future,” said Wolfie Zhao, an analyst at TheMinerMag.
Profitability in the Bitcoin mining space has reportedly shrunk due to a 55% rise in network difficulty over the past year. With each new block released at a fixed pace, the competition among miners has reduced potential rewards, making new hardware investments less appealing, which in turn is a headache for the providers of the hardware.
Rig manufacturers such as Bitdeer are left in a bind. Its Sealminer rigs, introduced in 2024 to compete with MicroBT’s WhatsMiner and Bitmain’s Antminer, entered the market just as buyers started developing cold feet for shopping.
According to reports, Bitmain still controls roughly 82% of the global mining rig market, with Bitdeer and others still trying to claw considerable share as well.
However, Bitdeer is tackling its problems uniquely, as it has started deploying its own machines across a growing network of data centers, rather than waiting for demand for its hardware to recover.
“Our strategy was to increase our self-mining hashrate while getting rigs into the market in smaller quantities so people could get comfortable with us as a new vendor,” said Jeff LaBerge, Bitdeer’s head of capital markets and strategic initiatives
Much of Bitdeer’s recent growth has been powered by international expansion. About three-quarters of the 20 EH/s added this year came from facilities in Norway and Bhutan, with new sites planned for Ohio, Alberta and Ethiopia. The company has positioned itself to leverage low-cost energy and favorable regulatory environments, aligning with a growing trend among miners seeking geographic diversification.
Manufacturing chips for mining rigs requires large upfront payments to foundry partners such as TSMC, well before production begins, a model that demands substantial financing and exposes the company to execution risk.
Analysts monitoring the space have pointed out that Bitdeer is managing this burden by sourcing outside capital from investors, including Tether, and refinancing debt through lower-coupon convertible bonds.
The company projects that a 40 EH/s capacity could generate roughly $750 million in annualized revenue with gross margins above 50%.
Faced with dwindling margins and increasing competition, manufacturers are diversifying their portfolios, with some pivoting into cloud computing and other allied services, even those in the active mining business.
However, others like Bitdeer are deploying their own equipment to get more bang for their buck, which in this case involves deploying their own machines. The expansion coincides with rising network hashrates, a sign that competition is intensifying even as profitability declines.
“It’s likely to remain a buyer’s market for the foreseeable future,” Zhao said, noting that manufacturers flooding the market with new machines could suppress prices further.
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