Singapore-based Bitdeer Technologies, which was listed on Nasdaq in April this year, along with Bhutan’s investment arm Druk Holding & Investments, are looking at investors to fund up to $500 million that will be used to develop green crypto mining in the Himalayan kingdom.
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Druk and Bitdeer, which already runs data centres in Norway and the US, said that the fundraising targeting institutional investors will begin at the end of May and the goal is to set up carbon-free digital mining that taps Bhutan’s abundant hydroelectric power, the two companies said in a statement on Wednesday.
Mining cryptocurrency needs large amounts of electricity to power the vast computer farms, drawing flak from the environmentalists due to their impact on the climate and a search for greener mining options.
Soaring energy costs have also squeezed crypto firms, leading to the birth of several initiatives to find cheaper and more sustainable ways to power their operations in a notoriously risky and volatile industry.
Mining is the least risky way for Bhutan to tap crypto opportunities and for now the Kingdom will focus on Bitcoin, Ujjwal Deep Dahal, the chief executive officer of Druk Holding & Investments, said.
“It is important for us to look at assets that are low volume, high value, or digital assets for that matter, and try to position ourselves in a way that we can be competitive globally over time to build our economy,” Dahal said.
Forest-laden Bhutan, which is located between China and India, has a population of about 777,000 and has long sought to diversify an economy reliant on hydropower revenues. Druk manages the government’s investments in traditional areas like stocks, bonds, technology, energy, and real estate but also crypto mining and investment under what it calls a “future-facing” strategy.
Bitcoin miners race to solve complex mathematical puzzles using energy-hungry computing rigs, earning new supply of the token in return. That has led to criticism of the environmental fallout when dirty fuels supply the power.
The crypto miners were squeezed by a crash in digital-asset prices, rising energy costs and increased competition last year. Conditions have improved in 2023 amid a rebound in the crypto market.
Bitdeer, which is owned by Chinese entrepreneur Jihan Wu, is one of the top crypto miners by computer power and has one of the largest centres in Texas. The firm began trading on the Nasdaq last month after a long-delayed merger with a special purpose acquisition company finally closed.
Bitdeer expects to set up a 100-megawatt operation in Bhutan, with construction slated to start in the second quarter and be completed in July through September, according to a regulatory filing with Singapore’s stock exchange.
According to Bitdeer’s Chief Executive Officer Matt Linghui Kong, his company and Druk will also invest in the planned new fund.
Dahal said that Druk ventured into crypto mining under a “sandbox” approach when Bitcoin was at about $5,000. It also had some investments with the now bankrupt US digital-asset lenders BlockFi Inc. and Celsius Network LLC, but they were a small part of Druk’s portfolio and have been settled, Dahal added.
Bitcoin surged to a record high of almost $69,000 in a pandemic-era crypto boom that peaked in 2021. However, it fell to below $16,000 in 2022 but has since rebounded to about $28,500 in the last few days.