Blockstream raises $125 million to expand institutional Bitcoin mining services

Blockstream raises $125 million to expand institutional Bitcoin mining services

Blockstream, a leading Bitcoin infrastructure provider, announced on January 24 that it has raised $125 million in funding to expand its institutional Bitcoin mining services.

This funding round was led by Kingsway Capital, a UK-based private equity fund, and included participation from other investors such as Fulgur Ventures and Cohen & Company Capital Markets.

This is the first fundraising for Blockstream since its 2021 Series B round, in which the company raised $210 million to accelerate the construction of enterprise-class mining facilities with hosting capabilities for institutional customers. Following this round of funding, Blockstream reached a valuation of $3.2 billion.

Blockstream points to institutional Bitcoin mining services.

The company is experiencing increased demand for its hosting services due to its strong track record and significant size, as well as an industry-wide shortage of available power capacity. This hosting service has remained a resilient market segment compared to “prop” miners, whose operations have been impacted by Bitcoin price volatility and the crypto market.

Blockstream President and CFO Erik Svenson said this new fundraising would allow the company to accelerate its year-over-year revenue growth and continue building better infrastructure that contributes to Bitcoin's economic future.

Svenson highlighted the company’s focus on “reducing risk for institutional miners” by building high-quality use cases on the world’s most secure blockchain, Bitcoin.

2022: The year we learn not to rely on centralized projects

Blockstream CEO Adam Back said that 2022 was a learning year for the market, citing the numerous project failures and scams that caused massive monetary losses and the closure of several crypto companies. He believes these bad experiences should serve as a learning opportunity to “reduce the need for dependence on third parties.”

He encouraged players in the crypto ecosystem to move to decentralized structures and non-custodial Bitcoin-based architectures like Liquid's simple contracts to have full custody of their funds.

Back also highlighted that Liquid's simple contracts allow active traders to self-custody via offline limit orders, non-custodial options and collateralized loans, all from the safety of the trader's own hardware wallet, protected by their own keys. This technology is compatible with both decentralized and centralized order book exchanges.

Additionally, recent market failures and scams serve as a reminder of the importance of decentralization and self-custody in the crypto ecosystem.

While 2022 was a year full of bad experiences for many enthusiasts in the crypto ecosystem, it undoubtedly served as a learning experience for the crypto community to understand that there will always be malicious actors lurking to take advantage of innocent - and sophisticated - people.

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