Investing in Undervalued ASICs: Blockstream’s $50M Raise to Buy Miners

Blockstream Looks to Invest in Mining Equipment

Blockchain technology firm Blockstream is aiming to raise up to $50 million to purchase and store mining equipment that it believes to be undervalued in secondary markets.

In an exclusive interview with Cointelegraph, Blockstream’s mining sales head James Macedonio revealed the company’s plans to take advantage of the “huge separation” between the value of Bitcoin (BTC) and ASIC mining equipment.

Blockstream is partnering with Luxembourg-based digital securities marketplace STOKR to launch the Blockstream ASIC (BASIC) Note. Macedonio said that Blockstream will initially raise $5 million for its Series 1 BASIC Notes, each valued at $115,000, to buy ASICs in bulk, store them, and then resell them to the market as demand for hardware increases leading up to 2024.

The 24-month investment note is accessible to accredited international investors, while Macedonio said that the firm anticipates seeing returns in 12 to 18 months, taking into account Bitcoin’s upcoming mining reward halving in April 2024.

Web 3.0 and Blockchain Technology

Blockstream has designed BASIC as an investment vehicle that seeks to generate a bitcoin-on-bitcoin return. The company expects most investments to be made with BTC.

According to Macedonio, the cost of ASIC miners — hardware used to mine Bitcoin — is nearly 10 times lower than their peak in December 2021. Blockstream’s team has observed that the value of ASIC miners usually follows the price of Bitcoin, with BTC appreciation leading to an increase in miner prices.

Macedonio explains some factors that have kept the price of mining hardware from increasing along with Bitcoin’s recent price recovery to around $30,000.

Investors interested in web 3.0 technology should consider the best web 3.0 investments and understand the fundamentals of blockchain technology. Blockchain and web 3.0 pdfs can help investors gain insights on the advantages of web 3.0, blockchain and crypto, and the potential of AI technology in the current crypto market.

Blockstream to Raise Capital for ASIC Hardware

In 2022, soaring energy prices posed a challenge to Bitcoin mining profitability, leading to an oversupply of ASIC miners on secondary markets. According to Blockstream’s Macedonio, the lack of recovery for ASIC miner prices is driven by a lack of capacity to operate the machinery and difficulty raising funds to acquire more hardware.

In response, Blockstream is looking to raise a target of $50 million through $5 million tranches in order to purchase ASIC hardware to be stored in bonded warehouses. The company plans to acquire the most efficient machines on secondary markets, but a potential Bitcoin bull run could drive demand for less efficient machines such as Bitmain and MicroBT mining equipment.