Leading Bitcoin infrastructure company Blockstream has partnered with Luxembourg-based STOKR, the EU’s pioneering digital investment marketplace for alternative assets, to introduce a unique investment vehicle: The Blockstream ASIC (BASIC) Note.
Prices for Bitcoin miners, or ASICs, rose materially during the last bitcoin bull market, before crashing as the subsequent bear market deepened, reaching a bottom in December 2022.
Historically, while bitcoin and ASIC market prices have shown a high correlation, ASIC prices tend to undershoot bitcoin’s value in bear markets and overshoot in bull markets, suggesting a potential upside when denominated in BTC.
The BASIC structure is seeking to secure $5M for its Series 1 BASIC Notes, priced at $115,000 each, to buy ASICs at scale in the near term, warehouse them, and subsequently sell them back into the market once prices rebound in anticipation of the next Bitcoin halving event in April-May 2024.
Following the success of the Blockstream Mining Note (BMN), which raised $50M from investors across eight successfully launched tranches in 2021 and 2022, the BASIC Note is poised to generate interest in the market as the first tranche is made available today.
The BASIC Note is a bitcoin basis vehicle, aiming to generate a bitcoin-on-bitcoin return. It only charges performance fees when the returns surpass that of bitcoin itself. In other words, fees are levied only when the product outperforms bitcoin.
Similar to the Blockstream Mining Note, it is expected that the majority of investors will invest with bitcoin, hoping for a return that could potentially yield more bitcoin than their initial investment.
The investment product itself will be offered as an EU-compliant digital security on the Liquid Network.
This strategy is predicated on multiple factors, including:
- Anticipation of a strong bitcoin price recovery in late 2023 into 2024, which is likely to be coupled with an increase in ASIC prices (bitcoin and ASIC prices have historically been strongly correlated);
- Promising projected supply-demand dynamics within the Bitcoin mining and ASIC markets, as the approaching Bitcoin “halving” event will entice miners to refresh their fleets with new, energy-efficient machines;
- Capital markets beginning to thaw, providing more liquidity and access to capital for miners (which can be utilized to acquire ASICs).
“Since our founding in 2014, Blockstream has continuously been a leader in Bitcoin mining, from providing world-class mining infrastructure to delivering innovative investment vehicles like the Blockstream Mining Note,” said Blockstream’s CEO and Co-founder, Dr. Adam Back. “The BASIC Note arrives at an opportune time in the market, presenting a unique and carefully timed investment opportunity for any bitcoin-focused portfolio.“
Co-founder of STOKR, Arnab Naskar, believes that digital securities will revolutionize capital markets and serve as a bridge between Bitcoin and traditional finance. He states, “These securities not only have the capability to revolutionize capital markets but also pave the way for innovative financial products like the BASIC Note.”
For access and ongoing updates, register on STOKR. The BASIC Note is not available in all jurisdictions.
Every Series will have its unique set of BASIC Notes, issued via the Liquid Network.
About Blockstream Mining
Founded in 2014, Blockstream is the global leader in Bitcoin and blockchain infrastructure. Blockstream Mining offers turnkey Bitcoin mining services and solutions designed to provide institutions full transparency and control over their mining operations. By providing secure state-of-the art facilities for a reliable miner colocation, coupled with exceptional technical talent infrastructure, Blockstream Mining purpose-built data centers meet the strict physical and network security requirements of global institutional and enterprise customers. Keeping mining carbon emissions to a minimum, current mining sites are located in the US and Canada, using a majority of non-fossil power sources.
STOKR is a leading digital marketplace for alternative investments, connecting entrepreneurs and asset managers to next-generation professionals and retail investors. On STOKR, both institutional and retail investors can access diverse and high-quality investment opportunities and directly control their investment assets. As the CSSF (Commission de Surveillance du Secteur Financier), Luxembourg supervised Virtual Assets Service Provider, STOKR offers turn-key solutions for young and growing ventures looking to raise capital in the EU through all elements of institutional-grade asset tokenization, including sophisticated investment structuring, smart contract management, AML/KYC verification, payment rails (crypto and fiat), and the full life-cycle management of digital securities.