The announcement marks a major expansion of Blockstream’s asset management business and adds to the company’s growing portfolio of Bitcoin-focused services.
“Blockstream’s institutional-grade Bitcoin investment solutions will go live on April 1, with external capital acceptance opening on July 1,” the firm confirmed on March 4 via X (formerly Twitter). The announcement follows an earlier report from Bloomberg that revealed the scale of the investment.
Our Bitcoin-backed funds now have an official launch date.
As reported by Bloomberg, Blockstream’s institutional-grade Bitcoin investment solutions will go live on April 1, with external capital acceptance opening on July 1.
The company was co-founded by Adam Back, a Bitcoin pioneer who has been involved with cryptocurrency since its early days. Back is known for his work on Bitcoin development and has been a vocal advocate for Bitcoin’s role in the financial system.
The three new funds will offer different services to institutional investors. The first fund will focus on Bitcoin-backed lending, allowing investors to use their Bitcoin as collateral for loans. This provides a way for Bitcoin holders to access liquidity without having to sell their assets.
The second fund will enable USD-collateralized borrowing. This will let investors unlock liquidity from their Bitcoin holdings without needing to sell them, which could be useful for those who want to maintain their Bitcoin positions while accessing cash.
The third fund will deploy hedge fund strategies. It aims to offer institutional-grade exposure to Bitcoin markets through various investment approaches. This adds to Blockstream’s existing investment products launched earlier this year.
In January, Blockstream debuted its asset management business with two initial funds. The Blockstream Income Fund focuses on loans between $100,000 and $5 million. The Blockstream Alpha Fund aims at portfolio growth by providing investors exposure to “infrastructure-based revenue streams like Lightning Network node operations.”
Crypto Lending
The crypto lending business has faced challenges in recent years. The collapse of crypto exchange FTX hit the sector hard. FTX’s falsified balance sheets and inability to repay loans resulted in several bankruptcies among previously trusted crypto lenders.
Blockstream’s move into this space comes with the backing of major financial resources. This could help restore confidence in crypto lending among institutional investors who have been cautious since these previous market failures.
The company has been expanding its operations globally. Blockstream recently opened a new office in Tokyo, Japan. This expansion aims to drive adoption of Bitcoin Layer-2 technologies and self-custody solutions in the Japanese market.
Blockstream is also working on real-world asset tokenization in Japan. This involves putting traditional assets like real estate or securities on a blockchain to make them more easily tradable and accessible.
The company already offers products such as the Liquid Network. This is a Bitcoin sidechain launched in 2018 that provides faster transactions than the main Bitcoin network. In October, Blockstream secured $210 million in financing through convertible notes to support its growth.
Crypto Investment Funds
With these new funds, Blockstream joins other major companies in the crypto investment space. Firms like Grayscale, Pantera, Galaxy Digital, and Crypto.com already offer crypto-focused investment funds with various levels of market exposure.
Back has been outspoken about maintaining Bitcoin’s role as the primary cryptocurrency. He recently criticized former President Donald Trump’s plans for a strategic crypto reserve because it would include cryptocurrencies besides Bitcoin.
Trump had announced the strategic crypto reserve on March 2, stating that it would include Bitcoin and Ether. He also mentioned including XRP, Solana, and Cardano, which sparked criticism from Bitcoin supporters like Back who believe in Bitcoin’s unique position in the crypto ecosystem.
The two lending funds from Blockstream will be available for borrowing once they launch. This creates new options for institutional investors looking to participate in the Bitcoin economy while managing their assets strategically.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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By Nermeen Nabil Khear Bitcoin-backed lending – Secure institutional…