Flowing against wind:
According to CEO Adam Back, the new funding would increase the company’s mining capacity.
It may not be the ideal moment to raise money during a bad market, but Blockstream is doing just that.
According to a December 7 Bloomberg story, the crypto infrastructure company is looking for the new capital at a far lower valuation than earlier rounds.
When Blockstream launched its final Series B investment round, raising $210 million in August 2021, it was valued at $3.2 billion. According to the research, that worth dropped by roughly 70% to less than $1 billion today.
According to CrunchBase, the 2014-founded startup has garnered $299 million in fundraising over four stages.
Adam Back take:
Adam Back, the CEO of Blockstream and a cryptographer, would not disclose the specifics of the most recent investment round. Still, he did say that the money would be used to increase the company’s mining capacity.
We quickly used up all of the available capacity and currently have a considerable backlog of both current and potential clients who are miners looking for large-scale hosting with us.
To create a solar-powered Bitcoin mining facility, the company is collaborating with Jack Dorsey’s Block (previously Square). According to a report in April, the mining farm will have a 3.8 megawatt (MW) power capacity thanks to Tesla’s solar technology and its 12 MWh “Megapack” lithium-ion battery.
Back said that while hosting fees had increased over the previous quarter and that “our mining services are a rapidly developing, high-margin enterprise business for us,” he noted that BTC pricing and mining profitability were down.
High hash rates and difficulty, high energy prices, and low BTC prices are putting a triple whammy on bitcoin miners. According to Hashrate Index, this has led profitability, or hash price, to drop to almost record-low levels of roughly $0.064 per TH/s per day.
On December 5, Blockstream published its monthly newsletter, revealing that almost halfway through the three-year term, the Blockstream Mining Note (BMN) token had generated a total return of about 5.37 BTC.
BMN is a security token that complies with EU regulations and gives authorized investors access to the Bitcoin hash rate at the company’s U.S. enterprise-grade mining.
The company has also been advertising a brand-new, limited-edition hardware wallet called “Jade Transparent,” saying it will “hodl our Bitcoin into the 2090s and beyond.”
Blockstream is conducting another funding round to expand its solar mining capacity amid a wider downturn for Bitcoin miners.