Tether-Backed North Data Makes Stunning Offers to Sell Its Crypto-Mining Arm: Bloomberg
Frankfurt, Germany-based software company Northern Data AG has reached an agreement to sell its crypto mining operations, according to a recent Bloomberg report. The move comes as the company looks to capitalize on November's bitcoin rally.
Northern Data Chief Financial Officer Elliott Jordan said the company has hired bankers, invited bidders and is now submitting proposals. “Continued is probably the best way to describe it – outstanding in terms of offers from different parties,” Jordan said in a presentation at the Deutsche Eigencapitalforum on Wednesday.
North Data to expand AI business
North Data, which is backed by Tether Holdings Limited, aims to raise funds to expand its human data services business. In particular, many miners are exploring this change after April's Bitcoin software update cut their primary source of income in half.
While North Data did not put a value on the business, Jordan reported it was valued at $300 million to $500 million before the Bitcoin rally. “It's definitely a good time to sell this place,” he told the investors.
Tim Wunderlich, an analyst at Hauck Aufhaeuser Lampe Privatbank AG, predicted that if peers were willing to pay $100 million per second for ehash operations, this could result in revenues of around $800 million in the best case scenario.
Also in May, the company announced its mining arm's partnership with Penguin Infrastructure Holdings on 28 megawatts of mining capacity, in a bid to increase its hashrate, the computing power that powers its entire network. “We mine 7.9 exahash which is less than 1% of the total Bitcoin mining,” Jordan said.
The transition from miners to AI
The Frankfurt-listed company decided to sell its crypto-mining business in October. This potential move will allow the company to focus on its growing artificial intelligence (AI) solutions business.
After the Bitcoin halving in April, many miners faced reduced rewards. August 2024 has been identified as the most difficult month for Bitcoin miners due to low payouts and reduced hashrate. To overcome these challenges, some miners have moved to support AI platforms, which require high computing power.
In particular, the transition of some Bitcoin miners to AI has strengthened their financial performance. JPMorgan said in June that Core Scientific's announcement to host 200 megawatt GPUs for Coreweave alone has added roughly $4 billion in market capitalization to roughly 14 Bitcoin mining companies.
Tether's commodity liquidity pool could reach $5 billion!
Recently, Tether CEO Paolo Arduino indicated that the size of Tether's investment liquidity pool set aside for financing commodity transactions could grow from $3 billion to $5 billion by 2026. Earn interest on temporary financing.
He underlined that it is a way to provide liquidity to a partner in an always liquid-starved sector. Tether Investments is working with some of the biggest commodity traders in the sector, Arduino said. They indicated that they are interested in using USDT for commodity trading because of its transparency and speed.
