The $125M funding will enable Blockstream to expand the Bitcoin mining capacity for institutional hosting customers

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Digital asset infrastructure company Blockstream announced on Jan. 24 that it raised $125 million to finance mining co-location services for its institutional hosting.

The financing was enabled by convertible notes and a secured loan. The round was led by VC firm Kingsway Capital, with participation from Fulgur Ventures.

Despite the bear market and Bitcoin price volatility, institutional hosting customers remained “resilient”, creating an increasing demand for Blockstream to?expand mining capacity.

At the end of 2022, the overall Bitcoin mining hashrate stabilized and profit margins gradually improved. Since the beginning of 2023, the crypto market has rallied, boosting hopes of an upturn in mining profits. The average hashrate rose to a record 280 exahash — or quintillion — operations per second on January 20, according to data from Hashrate Index.

However, the industry remains under solid pressure, especially when it comes to small- and mid-sized miners. High energy costs remain an issue that directly affects mining profitability.

While many miners such as Core Scientific couldn’t withstand the market slump, those who managed to avoid bankruptcy now reap the benefits. The 2023 rebound increased investors’ optimism. Therefore, listed mining companies like Marathon Digital Holdings and Hut saw their stock soar over 100% this year (155 % and 134%, respectively).

Blockstream itself had a strong 2022, with revenue growing threefold compared to 2021. As the strong demand for hosting continues into 2023, the company is positive about this year’s prospects and ready to keep “enabling enterprise users to build high-value use cases.”