Blockstream Preps New Sale of Notes Designed to Profit From Rebounding BTC Mining-Rig Prices

Fresh from surpassing its $5 million target in Series 1 of its “BASIC” notes designed to profit from rebounding bitcoin mining-rig prices, Blockstream is returning to the market with a Series 2.

The bitcoin infrastructure firm raised $5.075 million for its Blockstream ASIC (BASIC) note Series 1 in September, of which it will allocate $4.876 million to acquire Antminer S19k Pro ASIC mining machines.

The target for Series 2 is as yet undisclosed, according to a Blockstream spokesman.

Blockstream is aiming to capitalize on “historically low prices” for mining hardware ahead of 2024’s bitcoin halving, according to an emailed announcement on Wednesday.

BASIC is a bitcoin-denominated investment vehicle to accrue gains from the price of ASIC mining equipment, which Blockstream anticipates will rise post-halving.

A pitch for the notes describes the investment strategy like this: “Leveraging Blockstream’s long track record, leading market position, substantial scale, broad expertise and strong relationships across the ASIC supply chain, the BASIC structure plans to acquire and warehouse new and unused ASICs at attractive prices, and to eventually strategically sell them back into the market as the industry rebounds within the next 12-24 months.”

While bitcoin halvings – the four-yearly event when the reward for mining new BTC gets cut in half – is historically positive for the bitcoin price, it does mean mining firms have to offset the smaller rewards to ensure their books are balanced by buying newer and more efficient machines