Bitdeer Shares Plunge 20% as ASIC Development Causes Half a Billion Dollar Losses
Shares of Singapore-based bitcoin miner Bitdeer fell on Tuesday after the company reported a $532 million loss for the fourth quarter, amid efforts to build its own mining chips.
By Tuesday morning New York time, the company's shares had fallen 20%, hitting a three-month low of about $11.50 on the Nasdaq.
While the company reported more than 2.6 gigawatts (GW) of power in the fourth quarter, it takes a unique approach to its power-hungry machines. These machines, used for mining, are specialized hardware that crypto miners use to perform the complex calculations needed to verify transactions and earn Bitcoin block rewards.
Bitdeer is developing its own line of application-specific integrated circuits (ASICs) focused on Bitcoin mining. In Q4, the company announced the start of mass production of the SEALMINER A1 Bitcoin mining hardware.
The company's revenue for the fourth quarter was $69 million, up from $115 million a year earlier. Bitdeer said the result was significantly impacted by last year's Bitcoin halving, a scheduled event that halves the rewards for Bitcoin roughly every four years.
In a field dominated by Bitmain’s line of so-called antminers, Bitdeer believes it can become “the leading provider of the world’s most energy-efficient mining ASICs.” In the fourth quarter, the company reported that it had reached the final stages of development for its second- and third-generation mining chips.
The company reported research and development expenses of $23 million, up from $8.3 million a year earlier, citing increased design costs related to its ASIC development roadmap.
While the company's financial results have suffered due to the development of its own bitcoin mining chips, Bitdeer's chief commercial officer Matt Kong said the move “has strengthened our competitive advantage” over other bitcoin mining companies.
“Owning and operating our own ASIC miners is a key element of our full vertical integration strategy,” he said in a press release, highlighting as one of the main benefits “a significant supply chain improvement compared to the wider industry.”
Meanwhile, stablecoin giant Tether owns a 25% stake in the Singapore-based mining company, according to an SEC filing last June. At the time, Bitdeer shares were trading at around $7.15.
Bitdeer reported a $414 million loss on Tuesday due to changes in the value of convertible bonds issued last year. Convertible bonds used by Strategy, which buys bitcoin, are debt that can be converted into equity by the buyer.
Bitdeer said so-called Tether orders, which allow the stablecoin giant to buy Bitdeer shares at a certain price on a certain date, caused a $56 million loss due to changes in their value.
When the price of Bitcoin surged last November on the back of President Donald Trump's election victory, JP Morgan singled out Bitdeer as a major beneficiary. The company's stock price increased 83% that month, thanks to strong performances by other Bitcoin miners.
Despite the halving’s challenges, Bitdeer shares have risen 63% over the past year. In January, the miner’s shares hit a record high of $26.99 per share, according to Yahoo Finance.
Edited by Stacey Elliott.
Source: cryptonews.net
