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Blockstream is raising funds through the issuance of a new security token, the Blockstream Mining Note 2 (BMN2), which is backed by the company's Bitcoin mining hashrate. According to an announcement on September 5, BMN2 tokens are priced at $31,000 each and represent a 48-month claim on one petahash per second (PH/s) of Blockstream’s mining hashrate.
The BMN2 token provides investors with exposure to the {Bitcoin} (BTC) hashrate managed by Blockstream's enterprise-grade mining facilities across North America. Hashrate measures the computational power used in Bitcoin mining, and BMN2 allows holders to benefit from this power at a discounted hashprice of $21.23. This contrasts with the spot market hashprice, which was reported to exceed $40 as of September 5.
Blockstream's strategy involves selling future revenue claims from its Bitcoin mining operations to secure immediate capital. This move comes as Bitcoin miners seek to strengthen their financial positions following the network’s April "halving," which reduced mining rewards from 6.25 BTC to 3.125 BTC per block. According to JP Morgan, major Bitcoin miners raised approximately $1.2 billion in equity during the second quarter of 2024 to navigate the reduced profitability stemming from this halving event.
This marks the third issuance of BMN2 by Blockstream, following its launch in July, which raised nearly $7 million in its initial round. The company previously issued the Blockstream Mining Note 1 (BMN1) in 2021, which matured in July with a reported 32% return in Bitcoin over its three-year term.
The BMN2 token complies with European Union regulations and is available only to qualified investors outside the United States. Chris Cook, Blockstream’s Chief Investment Officer, stated that the BMN product was created to offer a stable hashrate and consistent investment outcomes.
