Blockstream’s Next Move: $50 Million Expansion Plan
Major crypto mining firm, Blockstream, is ramping up its game as it looks to raise a staggering $50 million. The goal? To bulk up its inventory of mining equipment, keeping the next Bitcoin (BTC) halving event in sight.
The Big “Separation” in Bitcoin and ASICs
James Macedonio, Blockstream’s point person for mining sales, elaborated on the growing disparity between the prices of Bitcoin and mining application-specific integrated circuits (ASICs). He pointed out the increasing potential for profit as this separation continues to widen.
Fundraising via STOKR: The Blockstream ASIC (BASIC) Note
To achieve its fundraising goals, Blockstream has chosen the Luxembourg-based digital securities marketplace, STOKR. Here, they’ll be floating the Blockstream ASIC (BASIC) Note. Macedonio breaks down the strategy: starting with a $5 million series one offering, each note will be valued at $115,000. The ultimate $50 million target is set to be reached in $5 million tranches.
A New Bitcoin Investment Vehicle: The BASIC Note
Promising to “generate a Bitcoin-on-Bitcoin return”, these BASIC notes are not just an investment but a reflection of Blockstream’s confidence in Bitcoin’s future. A significant portion of these investments is expected to be made using Bitcoin.
Sharp Decline in ASIC Prices: An Opportunity?
Macedonio highlights a crucial market insight – while Bitcoin prices have slashed to half, ASICs have plummeted even further, costing just one-tenth of their December 2021 peak prices. This significant price drop in ASICs, despite their historical correlation with Bitcoin prices, presents a unique market dynamic.
The Market’s Downward Spiral and the Expected Resurgence
The past years haven’t been kind to the crypto industry. Not only did cryptocurrency prices see a sharp decline, dragging many enterprises down, but the ballooning energy costs also added to the woes by making mining operations less lucrative. This situation resulted in decreased demand for mining hardware. However, Blockstream, with an optimistic lens, expects the tides to turn and aims to ride the next wave of price surges.
Eye on Efficient ASICs and Predictions for the Future
Blockstream’s strategy is clear – target the most efficient Bitmain and MicroBT ASICs available in secondary markets. Yet, Macedonio gives a nod to the broader market sentiment by stating that any significant uptick in Bitcoin’s price will naturally spur demand for even the less efficient machines. As he aptly put it, “if Bitcoin goes to $70,000 or more, everyone will be scrambling for any available ASICs to capitalize on the heightened mining profitability.“
