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Digital asset infrastructure company Blockstream has raised $125 million to finance its Bitcoin (
$80,486.00 ) (BTC) mining colocation services, underscoring heightened demand for its institutional hosting services amid the bear market.
The $125 million raise was financed by convertible note and a secured loan, Blockstream announced on Jan. 24. Venture capital firm Kingsway Capital led the convertible note raise, with additional participation from Fulgur Ventures. Cohen & Cohen Capital Markets, part of J.V.B. Financial Group, advised Blockstream on the deal.
The funding will enable Blockstream to expand mining capacity for institutional hosting customers — a segment the company said was “resilient” in the face of Bitcoin ( $80,486.00 ) price volatility compared to so-called prop miners. This latter segment is “more directly exposed to Bitcoin ( $80,486.00 ) price volatility and compressed margins,” Blockstream said.
“We remain focused on reducing risk for institutional Bitcoin ( $80,486.00 ) miners and enabling enterprise users to build high-value use cases,” said Erik Svenson, Blockstream’s president and chief financial officer.
Related: BlockFi to sell $160M in Bitcoin ( $80,486.00 ) miner-backed loans: Report
A protracted bear market in crypto, punctuated by several high-profile bankruptcies that culminated in the FTX collapse, placed significant pressure on Bitcoin ( $80,486.00 ) miners. In December, Bitcoin ( $80,486.00 ) mining giant Core Scientific filed for 11 bankruptcy due to plunging revenues.
Mining operation Greenridge avoided bankruptcy in December by receiving a $74 million lifeline from New York Digital Investment Group.
As reported by Cointelegraph, Bitcoin ( $80,486.00 ) miners’ worst days may have passed as hashrate stabilized and profit margins gradually improved toward the end of 2022. However, the industry remains under pressure, especially for small- and mid-sized miners with breakeven prices above $25,000 BTC.
