Blockstream, a provider of crypto infrastructure, raised $125 million through the sale of convertible notes and secured loans to fund the expansion of its bitcoin hosting services.
According to a press release published on Tuesday, the firm, which raised $210 million in August at a valuation of $3.2 billion, said it would utilize the funds from the new capital to expand its mining facilities to fulfill the high demand for large-scale hosting services. “Hosting has remained a resilient market segment as compared with ‘prop’ miners (and their lenders) who have been more directly exposed to bitcoin price volatility and compressed margins,” the statement added.
The CFO and President of Blockstream, Erik Svenson, said, “we remain focused on reducing risk for institutional bitcoin miners and enabling enterprise users to build high-value use cases.”
What happened in 2022?
Blockstream CEO Adam Back referred to the numerous project failures and frauds that resulted in significant financial losses and the collapse of various crypto enterprises when he remarked that 2022 was a learning year for the market. He thinks these negative experiences should be used as a teaching tool to “reduce the need for reliance on third parties.”
To have full custody of their cash, he urged participants in the crypto ecosystem to switch to decentralized and non-custodian bitcoin-based architectures, including Liquid’s simple contracts.
With a focus on developing infrastructure and software based on the Bitcoin network, Blockstream was established in 2014. CEO Adam Back and nine others, including Bitcoin Core engineer Gregory Maxwell, co-founded the company. Adam Back is the creator of Hashcash, a technique for preventing spam emails that influenced Satoshi Nakamoto’s proof-of-work consensus mechanism design for Bitcoin.