If that's not a strong signal: Tether, the largest stablecoin provider in the world, now wants to become the largest Bitcoin mining company in the world. This is behind it.

Bloomberg learned from An interview with Tether CTO Paolo Ardoino That the provider of the largest stablecoin Bitcoins wants to go mine. The company plans to invest about half a billion dollars for this purpose. The money will be spent on both building its own mining facilities and investing in other companies within the industry.

Tether: the most profitable company in the world

Measured by the number of employees, there is probably no more profitable company in the world. At least if you look at the past few months. Tether has earned billions of U.S. dollars thanks to the sharp rise in key interest rates.

After all, the US dollar stablecoins (USDT) issued must be backed by US dollar money, particularly US government bonds. The company retains interest income, which, according to Bloomberg, has led to to a surplus of about US$3.2 billion.

So investing about one-sixth of this in Bitcoin mining facilities is realistic. So while Bitcoin miners have to sell their assets to pay current bills, Tether can draw from the entire surplus. Tether seems to want to take advantage of the countercyclical momentum.

Bitcoin mining facilities

Ardoino told Bloomberg that Tether plans to build Bitcoin mining facilities in Uruguay, Paraguay and El Salvador, each with a capacity of between 40 and 70 megawatts. The goal of this effort is to increase the proportion of total computing power needed to run the Bitcoin network to 1 percent.

However, Ardoino did not give a specific timetable for achieving this goal. By comparison, the largest listed Bitcoin mining company, Marathon Digital Holdings, contributes about 4 percent. However, the massive expansion is also intended to catch up with Marathon Digital Holdings. A total of 120 megawatts is planned for the end of 2023 and 450 megawatts by 2025.

Bullish signal for Bitcoin

Tether's move into the Bitcoin mining sector should be seen as an absolutely positive sign for the Bitcoin price. Almost no other company has more crypto experience than Tether and knows the sector better. The fact that the company is now investing half a billion dollars in Bitcoin mining equipment shows how convinced Tether is about Bitcoin.

However, mining Bitcoin may also prove to be a smart move from a strategic standpoint. After all, Tether controls larger and larger parts of the crypto ecosystem and can benefit from synergy effects - between the Bitfinex exchange, the stablecoin sector and the mining sector. Risk can also be spread across different industries.

This makes the company even more independent of hype and macroeconomic conditions. For example, if interest rates fall again or even tend toward zero, Tether could benefit more from Bitcoin trading while USDT yields fall.