Following the success of Series 1 of its “BASIC” notes, which were intended to capitalize on the rising price of bitcoin mining rigs, Blockstream is making a comeback to the market with Series 2.The September Blockstream ASIC (BASIC) note Series 1 raised $5.075 million for the bitcoin infrastructure company, of which $4.876 million will be used to purchase Antminer S19k Pro ASIC mining equipment.
A Blockstream representative stated that the Series 2 target has not yet been revealed.According to an email message on Wednesday, Blockstream wants to take advantage of “historically low prices” for mining hardware in advance of the 2024 bitcoin halving.Designed to profit from the price increase of ASIC mining equipment that Blockstream believes will occur after the halving, BASIC is an investment vehicle denominated in bitcoin.
A pitch for the notes describes the investment strategy like this: “Leveraging Blockstream’s long track record, leading market position, substantial scale, broad expertise and strong relationships across the ASIC supply chain, the BASIC structure plans to acquire and warehouse new and unused ASICs at attractive prices, and to eventually strategically sell them back into the market as the industry rebounds within the next 12-24 months.”
Bitcoin halvings, which occur every four years and decrease the incentive for mining new bitcoins in half, have historically been good for the price of bitcoin, but they do force mining companies to purchase newer, more effective equipment to make up for the smaller rewards and keep their books balanced.