The depths of a bear market may not be the best time to raise money but that is exactly what Blockstream is doing.
The cryptocurrency infrastructure company has received new funding, but at a valuation significantly lower than previous rounds, according to a Bloomberg report Dec. 7.
Blockstream was valued at $3.2 billion when it held its last Series B funding round to raise $210 million in August 2021. Today that valuation may have fallen nearly 70% to less than $1 billion according to the report.
The company, which was founded in 2014, has raised a total of $299 million in funding over four rounds, according to CrunchBase.
Blockstream CEO and cryptocurrency Adam Back did not share details of the latest funding round, but revealed that the capital will be invested in expanding the company’s mining capacity.
“We quickly sold out all capacity and have a large backlog of new and existing customers with miners who are seeking large scale hosting with us.”
The company is working with Jack Dorsey’s Block (formerly Square) to develop a solar-powered bitcoin mining facility. The mining farm will have 3.8 megawatts of electrical capacity using Tesla solar technology and 12 megawatt-hour lithium-ion “megapack,” Cointelegraph reported in April.
Buck acknowledged that bitcoin prices and mining profits have fallen, but added that “hosting rates have been rising over the past quarters and our mining services are a rapidly expanding, high-margin business for us.”
Bitcoin miners are currently experiencing a triple whammy of high hashrate and difficulty, high energy prices, and low bitcoin prices. This has caused profitability, or hash rate, to plummet to near record lows of $0.064 per TH/s per day, according to Hashrate.
Related: Blockstream CEO Adam Back Talks Bitcoin Over a Game of Jenga
In its monthly newsletter on December 5, Blockstream revealed that the Blockstream Mining Note (BMN) token has accumulated around 5.37 BTC in returns around the halfway point of the three-year period.
BMN is an EU-compliant security token that provides qualified investors with access to the Bitcoin hash rate in the company’s enterprise-grade mining in the United States.
The company is also promoting a new limited edition “Jade Transparent” hardware wallet that it claims is “cramming our bitcoins into the 90s and beyond.”