Global Bitcoin (BTC) leader Blockstream is on the lookout for fresh capital at a valuation lower than that of its most recent funding round.
It is suspected that the implosion and contagion of the FTX Derivatives Exchange could have contributed to this devaluation. Especially, as this is a challenging time for digital asset firms as well as venture capital firms.
More than a year ago, the Canadian-headquartered crypto infrastructure secured $210 million in a Series B funding round which was led by investment management company Baillie Gifford and iFinex, the parent company of cryptocurrency exchange Bitfinex. This fundraiser pushed the valuation of Blockstream to $3.2 billion.
Notably, the current size of the funding which the startup is seeking is yet to be disclosed, but according to the Chief Executive Officer (CEO) Adam Back, it will be used to boost the company’s crypto mining capacity.
At the current capital which the firm is seeking, its valuation may be below $1 billion as the company has plunged by 70% putting the unicorn status of Blockstream in jeopardy.
“We rapidly sold out all of the capacity and have a big backlog of existing and new customers with miners seeking large-scale hosting with us,” Bank announced
Blockstream Expands Crypto Mining Services
In April this year, Blockstream partnered with electric automobile company Tesla and fintech firm Block to launch a renewable method of mining BTC. Together they came up with a solar and battery mining facility.
Speaking of how the price of Bitcoin has plummeted in the past months, Back said “While Bitcoin price and mining profitability are down, hosting rates have risen over the last quarters and our mining services are a rapidly expanding, high-margin enterprise business for us.”
So far, many crypto miners have been hit by the current state of the crypto market. As the price continues to dwindle, there has been a surge in the cost of electricity causing many miners to default on loans. Most times, this leads to the seizure of their computer rigs.