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Monday, March 20, 2023

Blockstream raises $125M to finance expanded Bitcoin mining operations

Digital asset infrastructure firm Blockstream has raised $125 million to finance its Bitcoin (BTC) mining colocation providers, underscoring heightened demand for its institutional internet hosting providers amid the bear market. 

The $125 million elevate was financed by convertible observe and a secured mortgage, Blockstream introduced on Jan. 24. Venture capital agency Kingsway Capital led the convertible observe elevate, with extra participation from Fulgur Ventures. Cohen & Cohen Capital Markets, a part of J.V.B. Financial Group, suggested Blockstream on the deal.

The funding will allow Blockstream to broaden mining capability for institutional internet hosting clients — a phase the corporate stated was “resilient” within the face of Bitcoin worth volatility in comparison with so-called prop miners. This latter phase is “more directly exposed to Bitcoin price volatility and compressed margins,” Blockstream stated.

“We remain focused on reducing risk for institutional bitcoin miners and enabling enterprise users to build high-value use cases,” stated Erik Svenson, Blockstream’s president and chief monetary officer.

Related: BlockFi to promote $160M in Bitcoin miner-backed loans: Report

A protracted bear market in crypto, punctuated by a number of high-profile bankruptcies that culminated within the FTX collapse, positioned important stress on Bitcoin miners. In December, Bitcoin mining large Core Scientific filed for 11 chapter resulting from plunging revenues.

Mining operation Greenridge prevented chapter in December by receiving a $74 million lifeline from New York Digital Investment Group.

As reported by Cointelegraph, Bitcoin miners’ worst days might have handed as hashrate stabilized and revenue margins regularly improved towards the top of 2022. However, the trade stays beneath stress, particularly for small- and mid-sized miners with breakeven costs above $25,000 BTC.