Blockstream to Launch Bitcoin Lending Funds with Multi-Billion Dollar Investment

Blockstream, a prominent Bitcoin development firm, is set to launch three new institutional funds, including two that will allow institutional investors to lend and borrow using Bitcoin as collateral. The company has secured a multi-billion dollar investment to launch these funds, with the products aimed at offering advanced Bitcoin-backed financial services for institutional players.

In a statement on March 4, Blockstream confirmed that its institutional-grade Bitcoin investment solutions would be available starting April 1, with external capital acceptance beginning on July 1. These new offerings include Bitcoin-backed lending, allowing institutional investors to unlock liquidity without selling their Bitcoin holdings, and USD-collateralized borrowing. Additionally, Blockstream will provide hedge fund strategies that give institutional investors exposure to Bitcoin markets.

Blockstream's new asset management division made its debut earlier this year in January, introducing the Blockstream Income Fund and the Blockstream Alpha Fund.

• The Income Fund focuses on loans ranging from $100,000 to $5 million, catering to institutions looking for secured lending solutions backed by Bitcoin.

• The Alpha Fund targets portfolio growth and offers investors exposure to Bitcoin's infrastructure-based revenue streams, such as operations involving the Lightning Network.

The firm’s commitment to offering innovative investment products comes as Blockstream continues to expand its presence in the crypto and institutional finance sectors. In October 2024, Blockstream raised $210 million in financing through convertible notes to further develop its business and products.

Blockstream is entering a competitive space, joining other major players in the industry such as Grayscale, Pantera, Galaxy Digital, and Crypto.com, all of which offer various crypto-focused investment funds. These funds provide exposure to a wide range of crypto assets, including Bitcoin, Ether (ETH), and other cryptocurrencies, with varying degrees of risk and reward.

Blockstream’s Critique of Trump’s Crypto Reserve

Blockstream CEO Adam Back, a well-known Bitcoin pioneer, was among several industry leaders who criticized President Donald Trump’s proposal to create a strategic crypto reserve. Announced on March 2, Trump’s plan includes Bitcoin and Ether, but it also controversially incorporates other cryptocurrencies like XRP, Solana (SOL), and Cardano (ADA).

Back and others in the Bitcoin community have voiced their opposition to the inclusion of these non-Bitcoin assets, arguing that such a reserve would undermine the integrity and security of the broader cryptocurrency ecosystem. Bitcoin advocates have long championed the digital asset as the only truly decentralized and secure cryptocurrency, contrasting it with other altcoins that they view as more centralized or prone to regulatory intervention.

As Blockstream moves forward with its new funds, its products are set to give institutional investors a unique opportunity to engage with Bitcoin while maintaining control of their assets, providing new financial tools within the crypto space. With the company's strong backing and continued innovation in Bitcoin infrastructure, Blockstream looks to play a significant role in shaping the future of institutional Bitcoin investment.