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Bullish Blockstream to Invest $5 Million in New Bitcoin Mining Rigs Ahead of BTC Halving

2 mins
Updated by Geraint Price
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In Brief

  • Blockstream is buying mining rigs in anticipation of a Bitcoin (BTC) price surge after the 2024 spring halving event.
  • The company plans to raise $5 million via a new investment vehicle selling the Blockstream ASIC Note at $115,000 each.
  • With Bitcoin's current price at $29,127, each miner is rewarded $182,044.38 plus transaction fees.
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Bitcoin infrastructure company Blockstream is buying mining rigs it hopes will appreciate after the next halving. The company expects a sizeable asset price rebound after Bitcoin (BTC) software cuts block rewards to 3.125 BTC.

Blockstream expects the price of mining rigs, special computers used to clear Bitcoin transactions, to surge after the spring 2024 event. Miners use purpose-built computers called Application-Specific Integrated Circuits (ASICs) to guess the digital fingerprint or hash of a block of transactions.

Blockstream Bets on “Huge Correction” to Sell Mining Rigs Post-Halving

In bear markets, ASIC prices are often lower than Bitcoin’s price, while in bull markets, they can overshoot the asset.

The halving event, expected to be bullish, reduces the number of Bitcoins the software awards miners for guessing the correct hash of a transaction block. While bullish in the sense of avoiding deflation, the halving means miners need more machines to earn the same revenue.

“We think there’s a huge price correction coming where we see ASICs coming back up to where the Bitcoin price would be when the capacity is on a market,” said James Macedonio, Blockstream’s business development head.

Blockstream hopes the $5 million it will raise through the Blockstream ASIC Note will be the first of many tranches. It will offer each note for $115,000 on Blockstream’s Liquid network.

Blockstream CEO Adam Back said:

“We made quite a bit of money buying and selling miners, and we see that there’s really a financial opportunity here.”

ETF Approvals Could Complicate Inflows For Public Miners

But miners must remain well-capitalized to take advantage of the post-halving boom. While a boon for investors, the US Securities and Exchange Commission’s (SEC) anticipated approval of a spot Bitcoin exchange-traded fund (ETF) could hurt mining companies.

Speaking on Bloomberg Crypto, BitDigital CEO Sam Tabar said investors may choose the ETF over mining stocks as their preferred vehicle for Bitcoin exposure. As a result, miners must ensure their businesses have enough capital to absorb the shock of outflows.

Additionally, companies must lower risk by setting up operations in different regions. BitDigital wants to boost its mining power by adding several exahashes in different regions ahead of the halving.

Mining power is measured by how many guesses an ASIC can muster in one second. Most modern mining machines can generate more than one quintillion (that’s “1” with 18 zeros behind it) guesses per second.

Mining hashrate red-hot as Blockstream boosts mining fleet ahead of halving.
Mining hashrate is 360 million TH/s (369 EH/s) | Source: Blockchain.com

Despite the bear market, the combined hashrate of all mining equipment is currently around 386 exahashes per second. At Bitcoin’s current price of $29,127, the Bitcoin algorithm rewards each miner $182,044.38 plus transaction fees for a correct guess.

Interested in benefiting from the halving? Find out the latest and greatest mining rigs in our roundup here.

Got something to say about Blockstream Mining or anything else? Write to us or join the discussion on our Telegram channel. You can also catch us on TikTokFacebook, or X (Twitter).

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David Thomas
David Thomas graduated from the University of Kwa-Zulu Natal in Durban, South Africa, with an Honors degree in electronic engineering. He worked as an engineer for eight years, developing software for industrial processes at South African automation specialist Autotronix (Pty) Ltd., mining control systems for AngloGold Ashanti, and consumer products at Inhep Digital Security, a domestic security company wholly owned by Swedish conglomerate Assa Abloy. He has experience writing software in C,...
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