Today, Blockstream is launching the series 3 round for its second Mining Note—the BMN2.
This note will be accessible to eligible non-US investors and has been repriced compared to the series 1 and 2 rounds, which took place on July 18. The pricing for this round of the BMN2 is set at $31,000 per petahash per second (PH/s), equating to a hash price of $21.23. Investors who bought the BMN2 in the first and second rounds, during which the note was sold at a higher cost, will receive additional BMN2 to compensate for the price difference between the first two rounds and this latest one.
The launch of the BMN2 follows the successful performance of the first Blockstream Mining Note, the BMN1, which achieved a 32% return over BTC.
BMN2 Details
The BMN2 will be a hashrate-backed security token offering (STO) issued on Blockstream’s Liquid Network by Luxembourg-based virtual asset service provider (VASP) Stokr. The note provides 1 PH/s from Blockstream’s North American mining operations over a four-year period.
“Typically, hashrate contracts run from 30 days to six months,” James Macedonio, Senior Vice President of Global Sales at Blockstream, told Bitcoin Magazine, emphasizing how the duration of Blockstream’s note stands out from similar financial offerings. “It’s rare to see contracts extend even up to 12 months.”
Blockstream is offering the note in increments of 1 PH/s as petahash has established itself as the industry standard for measuring hash price, and the contract duration aligns with the four-year Bitcoin halving cycle.
“We aimed to secure a hash price for clients for four years, running up to the next halving,” he noted.
The minimum investment for professional investors is $10,000, while non-professional investors need to meet a minimum investment threshold of $115,000. Shares of the STO will be fungible and tradable in both full and fractional form on secondary markets including Bitfinex, SideSwap, and Merj Exchange. Macedonio stated that Blockstream’s pricing is highly competitive, with the note offered at a 50% discount to the current spot hash price.
“If you’re considering purchasing hashrate, this will be significantly cheaper than acquiring a hashrate contract on the open market,” he remarked.
BMN1’s Success
The BMN1, which provided 2 PH/s over a 36-month term, mined 1,242 bitcoin, yielding cash-on-cash returns of up to 103%, along with the previously mentioned 32% return over BTC. Blockstream aims to offer similar returns to investors with the BMN2.
“We positioned the BMN2 at a level we believe will provide investors with the same return potential,” said Macedonio.
“When we sold BMN1, it was around a 60% discount from what the hash price would have been at that time. Now, for BMN2, we’re offering it at approximately a 50% discount to the present spot hash price. Pricing for future series will be informed by prevailing hash prices.”
Blockstream will offer a 3% bonus in additional BMN2 securities to investors who choose to roll over from BMN1 to BMN2.
Distinctive Features of BMNs
Blockstream Mining Notes provide a unique value proposition for investors looking to gain exposure to bitcoin mining.
Macedonio pointed out that the BMN2 is priced at the equivalent of hosting mining equipment at 4.5 cents per kilowatt-hour (kWh), while larger clients currently incur costs exceeding 6.5 cents/kWh for hosting arrangements.
Additionally, with BMNs, investors are not required to purchase machines, nor must they worry about machine malfunctions or power restrictions. Investors also benefit from immediate deployment of their investment funds without delays in getting their machines operational after purchasing BMNs.
“I don’t believe there’s any other product out there that can compete with it,” Macedonio concluded.
