Blockstream Launches BMN2 Mining Note Targeting Bitcoin Miners, Promises 32% Return

Blockstream has launched the Series 3 round of its second Mining Note, the BMN2, which is now available to qualified investors outside the U.S.

Blockstream has launched the third round of its second Mining Note, offering investors an opportunity to gain exposure to Bitcoin mining at a discounted price.

The BMN2 is priced at $31,000 per petahash per second (PH/s), a hash price of $21.23. Investors from previous rounds, who purchased at higher prices, will receive additional BMN2 to adjust for the price difference.

The launch of BMN2 follows the first Mining Note, BMN1, which generated a 32% return over Bitcoin.

BMN2 Details

The BMN2 is a hashrate-backed security token offering (STO) issued on Blockstream's Liquid Network through Luxembourg-based virtual asset service provider (VASP) Stokr. It provides 1 PH/s from Blockstream’s North American mining facilities for a four-year duration.

"Hashrate contracts are typically 30 days up to six months," said James Macedonio, Blockstream's Senior Vice President of Global Sales, and noted that contracts rarely exceed 12 months.

BMN2 is available in 1 PH/s increments, which align with the industry standard for measuring hash price, and the note’s duration is set to correspond with Bitcoin’s four-year halving cycle.

Macedonio stated that the goal is to secure a stable hash price for customers over the next four years, extending through the next Bitcoin halving event.

The minimum investment for professional investors is $10,000, while non-professional investors must meet a $115,000 threshold.

Shares of the STO are fungible and can be traded in full or fractional units on secondary markets such as Bitfinex, SideSwap, and Merj Exchange.

Macedonio noted that the BMN2 is competitively priced, with a 50% discount relative to the current hash price.

He explained that this would be more cost-effective than purchasing hashrate contracts on the open market.

BMN1 Performance

The BMN1, which offered 2 PH/s over a 36-month period, mined 1,242 Bitcoin and delivered up to a 103% cash return while outperforming Bitcoin by 32%. Blockstream expects BMN2 to deliver similar results.

“We priced the BMN2 to a level at which we feel investors will get the same type of return,” Macedonio said.

He added that the BMN1 was sold at a 60% discount to the hash price at that time, and BMN2 is priced at a 50% discount to the current spot hash price. Future pricing will depend on the hash price at the time of issuance.

BMN1 investors rolling over into BMN2 will receive a 3% bonus in additional BMN2 securities.

Distinct Features of Blockstream Mining Notes

Blockstream Mining Notes offer a unique option for investors to gain exposure to Bitcoin mining.

Macedonio emphasized that Blockstream benefits from access to low-cost energy and competitively priced equipment, enabling the company to offer hashrate at a significantly lower price than others in the industry.

He pointed out that the BMN2 is priced similarly to hosting mining hardware at 4.5 cents per kilowatt-hour (kWh), whereas large customers generally pay around 6.5 cents/kWh.

BMN investors also avoid the complexities associated with purchasing and maintaining mining equipment, such as machine failures or power curtailment. Additionally, they do not face delays between their investment and the equipment going online.

Macedonio concluded by stating that he believes there is no comparable product on the market.