Blockstream's Investment Offering
Blockstream, a Bitcoin infrastructure company, plans to raise additional capital through a second series of its Blockstream ASIC (BASIC) Note offering. The company aims to purchase and sell ASICs based on the predicted demand for Bitcoin miners over the next two years. The decision to launch a second series is driven by a surplus of Bitcoin mining hardware available on the secondary market.
Successful Series 1
The initial raise of $5 million for the series 1 BASIC Note offering was a success. Blockstream used the funds to purchase unused Antminer S19k Pro ASIC miners, one of the most popular models, for $4.87 million. The hardware was obtained through SunnySide Digital.
Timing the Sale of Miners
Timing is crucial when it comes to selling miners. As the availability of second-hand miners decreases, buyers will have to turn to manufacturers, causing the price per terahash of units to rise. Blockstream experienced this situation in 2021 when it acquired miners for its hosting service but eventually sold some surplus miners at a significantly higher price than the purchase cost.
The Impact of Bitcoin's Price
The price of Bitcoin plays a significant role in the profitability of selling Bitcoin mining hardware. When miners calculate their investment, they consider both the dollar amount spent on hardware and the potential Bitcoin they can mine. The increase in Bitcoin's value during bull runs can lead to a drop in electricity costs for mining, presenting an opportunity for Blockstream to sell the acquired hardware.
Reactive Approach
Blockstream's series 2 BASIC Note offering will be reactive to market conditions and investor demand. Gauging the availability of hardware on secondary markets is not straightforward, despite the current low prices suggesting a surplus of inventory. The second series will be managed by STOKR, a Luxembourg-based security tokens platform, and will be available to accredited non-US investors with a minimum investment of $115,000 paid in Bitcoin, Liquid Bitcoin, or Tether.
