Blockstream Launches Bitcoin-Backed Lending Funds
1min read Blockstream, a leading Bitcoin development company, has secured a significant investment to launch three new institutional funds, two of which will focus on Bitcoin-backed lending. This move aims to provide investors with secured financing options without selling their Bitcoin holdings.
Blockstream confirmed on March 4 that its institutional Bitcoin investment solutions will go live on April 1. The company will begin accepting external capital for these funds starting July 1. The new investment products will offer Bitcoin-backed lending, allowing institutions to borrow against Bitcoin collateral. Additionally, they will provide USD-collateralized borrowing options, enabling investors to unlock liquidity while retaining their Bitcoin holdings. Hedge fund strategies will also be available, providing institutional-grade exposure to Bitcoin markets.
In January, Blockstream launched its asset management division, forming the Blockstream Income Fund and the Blockstream Alpha Fund. The Income Fund is designed for loans ranging from $100,000 to more than $5 million, with a portfolio focused on revenue streams from Bitcoin infrastructure, such as the Lightning Network. The company is also preparing to launch the Blockstream Yield Fund later this year, further expanding its Bitcoin-backed investment options.
Blockstream joins other major firms offering crypto-focused investment funds, including Grayscale, Pantera, Galaxy Digital, and Crypto.com. The company has been actively raising funds to support its expansion, securing $210 million through convertible notes in October 2024. Blockstream's new Tokyo office is part of its expansion strategy to bring Bitcoin-backed financial solutions to Japan and the wider Japanese market. The firm has also teamed up with a Japanese Bitcoin consultancy, Diamond Hands, and Fulgur Ventures to spur the adoption of Bitcoin layer 2 solutions and self-custody tools.
Blockstream CEO Adam Back reacted to Donald Trump's announcement of the strategic crypto reserve, which included Bitcoin and Ethereum, as well as other cryptocurrencies like XRP, Solana, and Cardano. Back was among several industry leaders who criticized the inclusion of assets beyond Bitcoin, questioning the rationale behind selecting multiple cryptocurrencies for the reserve.
Founded in 2014, Blockstream continues to create Bitcoin financial infrastructure such as the Liquid Network, a sidechain designed for off-chain, speedy transactions, and settlement services. As part of its wider strategy, the company is also exploring the tokenization of real-world assets.
