BitDeer Technologies Group, the Nasdaq-listed cryptocurrency mining company founded by industry veteran Jihan Wu, is pivoting from a hardware supplier to a major Bitcoin miner as demand for mining rigs weakens.
In a move that shows both confidence and necessity, the company has quadrupled its own mining capacity over the past year and now aims to rank among the top five miners in the world by computing power.
Bitdeer responds to slowing demand
The shift comes amid a slowdown in global demand for mining equipment. The biggest mining companies, most of them in the United States, are wary of overexpansion and pulling back on new purchases as network difficulties reach record highs, data show.
“We expect major mining companies to remain cautious in expanding their fleets for the time being,” said Wolfie Zhao, an analyst at TheMinerMag.
It has been reported that profitability in the Bitcoin mining sector has shrunk as network difficulty has increased by 55% over the past year. As new blocks are released at a steady pace, competition among miners reduces the potential rewards and makes investing in new hardware less attractive, creating a headache for hardware providers.
Rig manufacturers like Bitdeer are in trouble. The company’s Sealminer rig was introduced in 2024 to compete with MicroBT’s WhatsMiner and Bitmain’s Antminer, and entered the market just as buyers were starting to develop shopping cold feet.
According to reports, Bitmain still controls about 82% of the global mining rig market, with companies such as BitDeer looking to grab a significant share as well.
But rather than wait for demand for hardware to pick up, Bitdeer is tackling the problem on its own, as it begins deploying its own machines across its growing network of data centers.
Jeff LaBerge, Head of Capital Markets and Strategic Initiatives at Bitdeer, said:
Miners bet big on infrastructure and funding
Much of Bitdeer’s recent growth has been due to international expansion. Roughly three-quarters of the 20 EH/s added this year will come from facilities in Norway and Bhutan, with new locations planned in Ohio, Alberta and Ethiopia. The company is poised to take advantage of lower cost energy and a favorable regulatory environment, aligning with the 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, making this model capital intensive and exposing companies to execution risk.
Analysts monitoring the space say BitDeer is addressing the strain by raising external funding from investors including Tether and refinancing its debt through low-coupon convertible bonds.
The company expects its 40 EH/s production capacity to generate approximately $750 million in annual revenue with gross margins in excess of 50%.
Bitcoin mining enters a new phase
In the face of declining profit margins and increasing competition, manufacturers are diversifying their portfolios, with some, including those involved in active mining operations, pivoting to cloud computing and other related services.
However, companies like Bitdeer have introduced proprietary equipment to earn higher profits. In this case, you will need to bring your own machine. This expansion coincides with an increase in the network’s hashrate, indicating increased competition despite declining profitability.
“It will continue to be a buyer’s market for the time being,” Zhao said, noting that prices could be further suppressed if manufacturers bring a large number of new machines to the market.
