Tether-Backed Northern Data Striking Deals To Sell Its Crypto-Mining Arm: Bloomberg
Frankfurt, Germany-based software company Northern Data AG is close to reaching an agreement to sell its cryptocurrency mining business, according to the latest news Bloomberg Report. The move comes as the company looks to capitalize on Bitcoin’s rise in November.
Northern Data Chief Financial Officer Elliot Jordan noted that the company has hired bankers, invited bidders to come forward and is currently submitting proposals. “Ongoing is probably the best way to describe it – it’s advanced in terms of offers from multiple different parties,” Jordan said in a speech at Germany’s Character Capital Forum on Wednesday.
Northern Data expands artificial intelligence business
Northern Data, backed by Tether Holdings Ltd, aims to raise funds to expand its artificial intelligence services business. Notably, many miners are exploring this transition after an April Bitcoin software update cut their primary source of income in half.
Jordan noted that while Northern Data did not value the business, it reported a valuation of $300 million to $500 million before Bitcoin’s rise. “Obviously, now is a good time to sell this position,” he told investors.
Tim Wunderlich, an analyst at Hauck Aufhaeuser Lampe Privatbank AG, predicts that if peers are willing to pay $100 million per second for each exahash operation, that could result in divestment benefits of about $800 million in the best-case scenario.
Additionally, in May, the company announced that its mining arm had entered into a partnership with Penguin Infrastructure Holdings for 28 megawatts of mining capacity, aiming to increase its hash rate, the total computing power supporting the network. “We mined 7.9 exahash, which is just under 1% of total Bitcoin mined,” Jordan noted.
The transition from miners to artificial intelligence
The Frankfurt-listed company decided to sell its cryptocurrency mining business in October. The potential divestment could allow the company to focus on its growing artificial intelligence (AI) solutions business.
Since the Bitcoin halving in April, many miners have faced reduced block rewards. August 2024 is considered the toughest month for Bitcoin miners due to lower fees and reduced computing power. To address these challenges, some miners have turned to support artificial intelligence platforms, which also require significant computing power.
Notably, the transition to artificial intelligence for some Bitcoin miners has improved their financial performance. As JPMorgan noted in June, Core Scientific announced a deal to host 200 megawatts of GPUs for Coreweave, resulting in a $4 billion increase in the combined market capitalization of approximately 14 Bitcoin mining companies.
Tether’s commodity liquidity pool may reach $5 billion!
Recently, Tether CEO Paolo Ardoino noted that the size of the liquidity pool set aside by Tether Investment to finance raw material transactions could grow to $3 billion to $5 billion by 2026. Notably, Tether Investments plans to lend funds to commodity brokers and commodity brokers. Earn interest on temporary financing.
He emphasized that this is a way to provide partner liquidity to an industry that is always hungry for liquidity. Ardoino said Tether Investments already works with some of the largest commodities traders in the industry. He noted that they are interested in using USDT for commodity trading due to its high transparency and speed.