Skip to content Skip to sidebar Skip to footer

Blockchain infrastructure company Blockstream and its founder Adam Back have raised $125 million to increase its Bitcoin (BTC) mining capacity.

The company raised capital in a convertible note, a form of short-term debt led by Kingsway Capital. Cohen & Company Capital Markets, a division of JVB Financial Group. The first of these companies will serve as counsel to the firm.

Bitcoin BTC BTCUSDT Chart 1
The price of BTC with some gains on the daily chart. Source: BTCUSDT Tradingview

Blockstream sees strong demand for its products

According to a Press release, the company will use the funds to expand its facilities. Mining firm BTC wants to meet high customer demand for its institutional hosting services. Blockstream said:

Demand for Blockstream’s hosting services remains high due to the company’s strong track record and substantial scale, coupled with an industry-wide shortage of available power capacity.

Adoption of blockchain technology has slowed in recent months due to the impact of the crypto winter and the shaken collapse of crypto exchange FTX. Despite this, Blockstream noted an increase in demand from its customers.

Blockstream said providing this hosting service to its customers remains a strong market segment for the company. Previously, Blockstream raised $210 million in a Series B funding round led by Baillie Gifford and iFinex, the operator of Bitfinex, at a valuation of $3.2 billion.

The capital was used to accelerate Blockstream’s mining capabilities and acquire Spondoolies to launch an enterprise-grade miner. Blockstream Chairman and CFO Erik Svenson said the capital raised will enable the company to accelerate the year-over-year revenue growth created in 2021 with the Series B funding program. company will continue to build the infrastructure of the “future Bitcoin economy”.

Blockstream has over 500 megawatts of power capacity in its development pipeline, making it one of the largest mining companies in the world. Expanding its renewable energy mining products and further developing its Bitcoin mining division are also part of Blockstream’s 2023 goals.

Crypto Winters Has Learning Value

Adam Back added that 2022 was, in his own words, a “learning experience” for the cryptocurrency industry and market, as large-scale centralized entities and protocol failures characterized it.

For Back, 2023 should be a year of refocusing on security so that blockchains further reduce the need to trust third parties. The Blockstream found that this period of falling crypto prices represents an opportunity for market participants to transition to a “Bitcoin-based, non-custodial ecosystem.”

Unlike the company run by Back, other bitcoin miners like Core Scientific, one of the largest US-traded miners, filed for bankruptcy in 2022 after selling off their bitcoin holdings to pay off their debts. which led to the company being investigated for alleged securities fraud. Blockstream said:

Recent events in the broader cryptocurrency industry underscore the value and importance of the work Blockstream is doing in both blockchain development and bitcoin mining.

Source link

Leave a comment