Blockstream Receives Multibillion-Dollar Investment to Launch Bitcoin Lending Funds

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Sujha Sundararajan

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Sujha Sundararajan

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Sujha has been recognised as 🟣 Women In Crypto 2024 🟣 by BeInCrypto for her leadership in crypto journalism.

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Blockstream Bitcoin lending

Digital asset infrastructure firm Blockstream has announced the official launch of its three Bitcoin-backed funds, after securing a multibillion-dollar investment.

The Canadian firm confirmed on X that its “institutional-grade Bitcoin investment solutions will go live on April 1.” Further, the firm will begin adding external capital on July 1.

Bloomberg first reported that two of the funds will enable Bitcoin lending, citing unnamed sources.

One of the funds will underwrite Bitcoin-backed loans, while the other will use US dollars as collateral for crypto borrowing. The third will position hedge fund strategies, providing institutional-grade exposure to Bitcoin markets.

A Surge in Bitcoin-Backed Lending

With the growing adoption of cryptos and rise in Bitcoin prices, there is an increasing demand for loans that allow bitcoin holders to access liquidity without selling their assets.

Bitcoin’s more recognisable and secure nature has increased the demand for BTC-backed loans, coupled with the new administration in the US, said John Glover, Ledn’s CIO in an exclusive interview with Cryptonews.

“The growing demand for Bitcoin-backed loans results in an ever-increasing demand for funding to support this growth,” Glover said. “Institutional capital coming from investors both in the digital asset ecosystem as well as from TradFi is required to continue being able to fuel this growth.”

Blockstream wrote on X that the increase in institutional demand for Bitcoin-native finance has led the company to build a foundation “for a more robust and transparent lending ecosystem.”

Recently, financial services firm Cantor Fitzgerald announced that it is working with Tether on a multibillion-dollar Bitcoin lending program.

However, several crypto lenders such as Genesis Global Capital, Three Arrows Capital and BlockFi went bankrupt following the FTX implosion, leaving empty for liquidity providers.

Blockstream’s latest move in securing billions of dollars marks a renewed appetite, filling up the 2022’s crypto winter.

Blockstream’s Foray into Asset Management

The blockchain tech firm made its debut into asset management last year. The firm raised $210 million arranged through a convertible note, led by fundraising experts from Fulgur Ventures. The funding was intended to accelerate Blockstream’s layer-2 development.

In January, Blockstream officially launched its asset management division, along with revealing its two Bitcoin-based investment funds.

Dubbed Blockstream Income Fund and Alpha Fund, they were designed to meet growing demand for regulated, and secure financial products.

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