Blockstream Mining has announced a new security token, known as the Blockstream Mining Note 2 (BMN2), which is backed by the hashrate generated by its Bitcoin mining operations. The announcement was made on September 5.

The BMN2 token aims to provide investors with direct access to the Bitcoin hashrate produced by Blockstream’s advanced mining facilities throughout North America.

Each BMN2 token is priced at $31,000 and represents a 48-month claim on one petahash per second (PH/s) of Blockstream’s mining capabilities. The term “hashrate” refers to the computational power employed in the process of mining Bitcoin.

By offering this token, Blockstream effectively sells four-year claims on the revenues generated from its Bitcoin mining operations in exchange for immediate capital. Investors are presented with a notably reduced hashprice of $21.23, according to Blockstream.

Hashprice functions as a standard metric for evaluating the market value of hashrate. As of September 5, the market hashprice was reported to be over $40, based on data from hashrateindex.com.

In the wake of the Bitcoin network’s April halving, which reduced mining rewards from 6.25 BTC to 3.125 BTC per block, miners have been seeking ways to strengthen their balance sheets. A report indicated that five of the leading BTC miners raised approximately $1.2 billion in equity during the second quarter of 2024.

JP Morgan described this timeframe as historic, as Bitcoin miners faced implications from the fourth halving event, which effectively halved the number of coins mined daily, leading to decreased revenue opportunities and tighter margins across the sector.

This marks the third issuance of the BMN2 product by Blockstream, following a launch in July that generated nearly $7 million in its first round. Previously, Blockstream introduced a similar token, Blockstream Mining Note 1 (BMN1), which matured in July after delivering a 32% return on BTC over its three-year term.

Chris Cook, Blockstream’s chief investment officer, stated, “We created the BMN product to deliver a consistent hashrate with the goal of maintaining a strong and steady investment outcome.”

It’s important to note that BMN2 is designed to operate within the framework of European Union regulations and is available exclusively to qualified investors outside of the United States.