Bitdeer Technologies (NASDAQ: BTDR) has announced the acquisition of crypto Application-Specific Integrated Circuit (ASIC) design company Desiweminer, also known as FreeChain, in a $140 million all-stock transaction. This acquisition comes amid a challenging capital market environment but signals robust activity in the Bitcoin mining industry.
Since revealing the acquisition, Bitdeer's stock price has surged from $7.01 on June 5th to over $11. Investors liken FreeChain to Nvidia (NASDAQ: NVDA) in the blockchain space, as it designs the chips utilized in Bitcoin-mining activities. With demand for ASIC Bitcoin mining chips projected to reach $25.7 billion in the next eight years, Bitdeer is well-positioned to expand its market share, backed by its $368.6 million revenue reported in 2023.
The deal involves exchanging FreeChain's issued and outstanding shares for 20 million newly issued Bitdeer Class A ordinary shares. Conditions of the agreement stipulate that half of these shares cannot be transferred for six months post-closing, while the remaining shares must be held for 12 months.
The merger has been in development for nearly a year, during which Bitdeer thoroughly vetted FreeChain's technology, engineering staff, and supply chain strategy. FreeChain's workforce will be integrated into Bitdeer's operations in Singapore, with plans to introduce newly integrated products immediately.
According to Bitdeer, the merger aims to consolidate its position in the technology industry while accelerating its ASIC research and development capabilities. Bitcoin miners are rewarded with new bitcoins for securing the Bitcoin blockchain by completing complex mathematical transactions, making the equipment's computing power and hash rate crucial for profitability.
This acquisition significantly enhances Bitdeer's competitive position in the ASIC-chip market, which is dominated by a few key players. In response to this development, Wall Street firm H.C. Wainwright maintained its buy rating on Bitdeer stock, setting a bullish $20 price target.
Bitdeer Chief Business Officer Linghui Kong praised FreeChain's accomplishments, noting that nearly 30,000 of its high-performance machines are currently in use, positioning the company among the leading ASIC design groups globally. Kong stated, “Desiweminer’s remarkable achievements in ASIC design and their proven track record, with nearly 30,000 high-performance machines in the market, make them one of the top ASIC design groups in the world.”
Both Bitdeer and FreeChain focus on Bitcoin mining, providing the necessary infrastructure to secure the Bitcoin blockchain efficiently and profitably. FreeChain's advanced ASIC chip design, supporting semiconductor processes at 4nm and below, aligns well with Bitdeer's ambitions. This technological advancement enables Bitdeer to deliver a new generation of super-efficient Bitcoin mining chips by 2025, as the industry standard currently stands at 5nm chips.
Additionally, both companies are committed to energy efficiency, aiming to produce environmentally friendly ASIC chips for the energy-intensive Bitcoin mining process. With a market cap of approximately $1.5 billion, Bitdeer is a leading Bitcoin mining company. Founder and CEO Jihan Wu, who first translated Satoshi Nakamoto's Bitcoin whitepaper into Mandarin, has been a pioneer in ASIC technology for the Bitcoin mining industry.
Investors interested in the future of Bitcoin mining and ASIC technology may consider Bitdeer's growing potential, as the company continues to make significant strides in the industry.
