Blockchain technology startup Blockstream secured $125 million to expand its operations into the Bitcoin mining market, where its major competitors are struggling to stay afloat.
Bitcoin mining is a means of securing the blockchain that is financially motivated by Bitcoin users. Miners build Bitcoin blocks by using power-hungry, specialized technology, and they receive Bitcoins in compensation.Consequently, only the most cost-effective miners are left in the market as dollar-denominated earnings decline along with Bitcoin's market value. But now that Bitcoin has recently risen above $22K the typical miner can once more make a profit.
In a news statement, Blockstream's President & CFO Erik Svenson stated that "the fundraise will accelerate our year-over-year revenue growth and enable us to continue building infrastructure for the future Bitcoin economy."
The previous $210 million raise occurred in August 2021, along with several of cryptocurrency's largest raises, as the market was about to reach its all-time high market value of almost $3 trillion. The funds were used to construct mining facilities for hosting services, where clients rent the business's ASICs to mine Bitcoin for a set period of time. The funds raised on Tuesday will serve the same purpose. In addition to Blockstream's good track record and large scale, the company says there is a shortage of available power capacity, contributing to high demand for hosting services.
The company is one of the biggest mining companies in the world, with plans to build 500 megawatts of power. Core Scientific, a public company that was one of the biggest Bitcoin miners in North America, declared bankruptcy after it sold almost all of its Bitcoin assets. Core Scientific is being investigated for allegedly conducting securities fraud.
Similarly, Iris Energy was forced to reduce its Bitcoin mining capacity in May so it could settle its collateralized loan due in November for mining equipment.
The Bitcoin mining brand commented on the recent developments in the wider cryptocurrency sector underlining " the significance and importance of the work Blockstream is doing in both blockchain development and bitcoin mining."