The firm’s successful fundraising defied the odds as top bitcoin miners have admitted struggling to sustain afloat. A substantial number led by Core Scientific filed for bankruptcy, citing the liquidity crisis attributed to the crypto market meltdown.
Blockstream Successful Funding Round
Bitcoin mining involves the process of incentivizing crypto users to safeguard the blockchain. As such, the mining firms leverage special energy-intensive equipment in constructing Bitcoin’s block. The block earns the miner a fixed 6.25 BTC.
Blockstream illustrated that the decline in Bitcoin’s value eroded the dollar-denominated revenue generated by the mining firms. The downtrend in Bitcoin price weeds out all miners except for cost-efficient players from the sector. With the latest rally in Bitcoin price to $23000, average mining firms can run operations at a profit.
Accelerating Bitcoin Mining Infrastructure
Blockstream chief finance officer Erick Svenson lauded the fundraising to enable the mining company to accelerate annual revenue growth since the 2021 Series B. He added that the additional capital would facilitate the construction of infrastructure that will deliver the future Bitcoin economy.
Svenson indicated that Blockstream realized $210 million in the round concluded in August 2021. The executive indicated that the fundraiser coincided with a huge increment in crypto prices that yielded the highest market capitalization of $3 trillion. The chief finance officer explained allocating the money to building facilities for hosting services. It allowed clients to rent its ASICs and earn BTCs for a defined time. He restated the January 24 fundraising proceeds to help fund a similar purpose.
The firm revealed experiencing increased demand for its hosting services owing to its reputable performance. Also, Blockstream has an unmatched scale at a time when the industry is suffering strained power capacity.
Bitcoin Mining Firms Struggling to Sustain Operations
Blockstream is among the largest mining firms, with an estimated 500MW in the pipeline. The revelation comes at a time when rival miners Core Scientific filed for bankruptcy protection. The firm became bankrupt despite almost exhausting Bitcoin holdings. The sale proceeds hardly settled the miner’s debt. Meanwhile, Core Scientific is under investigation for allegedly committing securities fraud.
Iris Energy confronted similar challenges despite November’s efforts to dispose of its Bitcoin mining equipment to settle collateralized obligations.
The move by Blockstream portrays optimism by the mining firm to influence blockchain development. It underscores the firm’s devotion to optimizing returns in mining as bitcoin prices rally.
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