Blockstream Raises $125 mn For Bitcoin Mining
Crypto infrastructure company Blockstream raised $125 million in convertible note and secured loan financing to expand its bitcoin mining hosting services.
The company, which raised $210 million in August at a $3.2 billion valuation, said in a press release Tuesday it will use the proceeds from the new capital to expand its mining facilities to meet strong demand for large-scale hosting services, according to the statement.
Blockstream’s new funding round didn’t mention the valuation of the company. However, in Dec. 7, Bloomberg reported the company is seeking to raise funds at a 70% lower valuation than in its previous round, under $1 billion.
The company also plans to expand its renewable energy mining products and continue developing its own bitcoin mining machine.
Mining is the process by which Bitcoin users are financially incentivized to secure the blockchain. Miners use specialized, energy-intensive hardware to construct Bitcoin’s next block, for which they are rewarded with a fixed amount of Bitcoin—6.25 BTC as of this writing.
Blockstream is one of the world’s largest mining operators, with 500 megawatts in its development pipeline. Rival firms like Core Scientific—one of the largest publicly traded miners in North America—filed for bankruptcy in December after dumping nearly all of its Bitcoin holdings and failing to pay down debt. Core Scientific now being investigated for potentially committing securities fraud.
Iris Energy fell into a similar predicament, slashing its Bitcoin mining capacity in May to pay down its collateralized loans for mining hardware in November.
(With inputs from Shikha Singh)
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