Blockstream targets continued Bitcoin miner surplus with Series 2 BASIC Note

Blockstream will look to raise more capital to buy Bitcoin (

“That wasn’t our plan to get into the miner reselling game, but we had more inventory than hosting, so we sold off the surplus. That opened our eyes to this dynamic between ASIC and Bitcoin prices,” Back explained.

The Bitcoin bull run effect

Becoming “accidental beneficiaries” of the strategy underpinning the BASIC Note also highlights the importance of the “time value” of money and why the price of Bitcoin remains crucial in selling Bitcoin mining hardware for profit.

The BASIC Note is a #bitcoin-denominated vehicle that leverages Blockstream’s expertise in the Bitcoin mining sector to capitalize on historically low ASIC prices and the promising signs of recovery, anchored by the upcoming Bitcoin halving in 2024.https://t.co/mx9QJ9STun

— Blockstream (@Blockstream) December 13, 2023

Back explained that miners typically buy hardware for a dollar amount and calculate how much Bitcoin they can mine from that point. However, one has to factor in shipping times from a manufacturer, which means that the investment only begins to generate value once it arrives and is powered up.

“We said to people, ‘You can pay the manufacturer $60 a terahash, for example, but you’ll lose $50 waiting for it to arrive. Or you can pay us $100 per terahash. That’s a win for you because we can give it to you immediately,’” Back said.

The Blockstream CEO said that previous Bitcoin bull runs have resulted in situations where the electricity cost of mining drastically drops in percentage due to the increase in BTC’s value.

“The profit is like three times higher when the price doubles. In that situation, people go from being willing to pay $30 to $40 per terahash to being willing to pay between $100 to $130 per terahash, which is what happened last year,” Back recalled.

This presents the “tail end” opportunity to sell Bitcoin mining hardware that Blockstream has acquired.

BASIC Note will be reactive going forward

Blockstream’s BASIC Note Series 2 offering will likely be reactive to market conditions and demand from investors. Back noted that gauging how much hardware is available to buy on secondary markets is not so clear-cut despite depressed prices suggesting a surplus of inventory.

Luxembourg-based security tokens platform STOKR will manage the second series, which is set to go live around the turn of the new year. The product is available to accredited non-United States investors and requires a minimum $115,000 investment paid in BTC, Liquid Bitcoin (L-BTC) or Tether (USDT).

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