Blockstream’s Multi Billion-Dollar Fund Focusing on Bitcoin: Details

Bitcoin infrastructure firm Blockstream has secured a multibillion-dollar investment to launch three new investment funds focused on crypto lending and hedge fund strategies, according to Bloomberg. The Canadian company, co-founded by legendary Bitcoin developer Adam Back, aims to revive institutional crypto lending, a sector that took a major hit following the collapse of FTX in 2022.

The Three New Bitcoin Investment Funds

Blockstream’s latest venture includes three distinct funds, each catering to institutional investors and high-net-worth individuals:

• Bitcoin-Backed Lending Fund – Underwrites loans backed by BTC collateral, offering liquidity without requiring investors to sell their holdings.
• Crypto Borrowing Fund – Allows institutions to borrow using U.S. dollars as collateral, enabling them to access liquidity while maintaining exposure to crypto assets.
• Hedge Fund Strategy Fund – Deploys hedge fund investment strategies in Bitcoin markets, targeting high-yield opportunities and structured investments.

These funds are set to launch in April, with additional external capital acceptance beginning in July. The goal is to provide institutional-grade exposure to Bitcoin markets, positioning Blockstream as a major player in the evolving crypto finance sector.

Reviving Institutional Crypto Lending

Crypto lending has been on a rocky path since the FTX collapse, which exposed risky lending practices and left many institutional lenders bankrupt. However, Blockstream’s new investment initiative suggests that investor appetite for Bitcoin-backed loans is returning.

The company had already hinted at its lending ambitions in January. Now, with billions in funding secured, it aims to restore trust in crypto lending through strong risk management and institutional-grade financial products.

According to Bloomberg, the fresh investment into Blockstream reflects a renewed confidence in the long-term viability of Bitcoin-based financial services.

Trump’s Strategic Crypto Reserve Sparks Industry Debate

The timing of Blockstream’s announcement aligns with increased political and institutional interest in digital assets. Former U.S. President Donald Trump recently proposed a strategic crypto reserve, which could include Bitcoin, Ethereum, XRP, Solana (SOL), and Cardano (ADA).

Trump’s proposal has divided the industry, with Adam Back criticizing the move for including "lesser-known tokens" instead of focusing on Bitcoin as the dominant digital asset.

Industry experts believe the proposal, if implemented, could trigger the next phase of the Bitcoin bull market. 

Blockstream’s Expansion into Asia

Alongside its new investment funds, Blockstream is expanding its operations into Asia, signaling its ambition to grow beyond North America.

• The company opened an office in Tokyo, aiming to bring Bitcoin-backed financial solutions to Japan and the broader Asian market.
• It partnered with Diamond Hands, a leading Bitcoin strategic consultancy in Japan.
   
• Blockstream is also collaborating with Fulgur Ventures to promote the adoption of Bitcoin Layer 2 solutions and self-custody platforms.

As part of its investment strategy, Blockstream recently introduced Blockstream Asset Management, overseeing its newly launched funds.

The company has also revealed plans to explore tokenization of real-world assets (RWAs), allowing investors to gain exposure to physical assets through blockchain-based digital tokens.