Even though it might not be the best time to raise money, Blockstream is doing just that in the middle of a bear market.
A Bloomberg report from December 7 said that the crypto infrastructure company is looking for new funding, but at a much lower valuation than in the past.
Blockstream was worth $3.2 billion when it raised $210 million in August 2021 as part of its last Series B funding round. According to the report, that value may have dropped by almost 70% to less than $1 billion today.
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CrunchBase says that since the company was founded in 2014, it has raised $299 million in four funding rounds.
Adam Back, the CEO and chief cryptographer of Blockstream didn’t say much about the latest funding round, but he did say that the money will be used to expand the company’s mining capacity.
“We quickly sold out all of the space, and we have a long list of new and old customers who want to host large-scale mining operations with us.”
The company is working with Jack Dorsey’s Block (formerly Square) to build a bitcoin mining facility that runs on solar power. Cointelegraph reported in April that the mining farm will have 3.8 megawatts (MW) of electricity capacity. It will use Tesla’s solar technology and its lithium-ion 12-MWh “Megapack.”
Back said that BTC prices and mining profits were down, but he added, “Hosting rates have gone up over the past three months, and our mining services are a fast-growing, high-margin business for us.”
At the moment, Bitcoin miners are hit by a triple whammy: high hash rates and difficulty, high energy costs, and low BTC prices. The Hashrate Index says that this has caused the profitability, or hash price, to drop to near-record lows of about $0.064 per TH/s per day.
Blockstream said in its monthly newsletter on December 5 that its Blockstream Mining Note (BMN) token has made a total of about 5.37 BTC in returns so far, which is almost halfway through its three-year term.
BMN is a security token that meets EU standards and gives qualified investors access to the Bitcoin hash rate at the company’s enterprise-grade mining in the U.S.
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The company has also been advertising a new limited-edition hardware wallet called “Jade Transparent.” It says that it will “hold our bitcoin into the 2090s and beyond.”