Blockstream Is Betting on Bitcoin Comeback as It Hoards Crypto Mining Rigs

tech.hindustantimes.com:

Bitcoin developer Blockstream Corp. is betting that the world's most valuable cryptocurrency is poised for a massive rebound, and is buying up Bitcoin mining rigs so that it can sell them for a profit later should the prediction hold.

Montreal-based Blockstream was one of the earliest Bitcoin infrastructure companies, conceived in 2014 by CEO and co-founder Adam Back, among the industry insiders thought to be Satoshi Nakamoto, the pseudonymous creator of Bitcoin — speculation dispelled by Back.

Now, the company is looking to capitalize on Bitcoin's looming software upgrade — rather ominously dubbed the ‘halving' — which it expects will spur a rally in the digital asset's price, in turn pushing up the price of the specialized computers, or application-specific integrated circuit machines, used by miners to generate Bitcoins.

“We made quite a bit of money buying and selling miners, and then we're looking at the market and we see that there's really a financial opportunity here,” Blockstream's CEO Adam Back said in an interview.

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 Bitcoin, the firm said in a statement Tuesday.

A glut of mining machines flooded the market last year as Bitcoin's price plummeted, while major crypto lenders like New York Digital Investment Group have also liquidated machine-backed loans. After rebounding about 70% in the first quarter, the price of Bitcoin has stalled at around $30,000 for months. Bitcoin reached an all-time high of almost $69,000 in November 2021.

But Blockstream spies a window of opportunity as Bitcoin's halving approaches.