Blockstream Launches BMN2 Series 3 Token as Bitcoin Mining Enters a Pivotal Week

Bitcoin mining is at a crossroads. As network hashprice lingers near all-time lows following April’s halving, the industry is seeing a wave of institutional innovation aimed at making mining exposure more accessible — and more profitable. On September 5, 2024, Blockstream Mining opened the third series of its Blockstream Mining Note 2 (BMN2), a hashrate-backed security token that gives qualified investors direct exposure to Bitcoin mining without the headaches of hardware management. Meanwhile, Riot Platforms crossed a major milestone by surpassing 10,000 BTC in total holdings, and the escalating energy competition between Bitcoin mining and AI data centers is drawing fresh scrutiny from analysts and policymakers alike.

TL;DR

• Blockstream launches BMN2 Series 3, priced at $31,000 per PH/s, targeting $10 million in new investment with a four-year term — the longest hashrate-backed product on the market.
• Riot Platforms surpasses 10,000 BTC held, produces 322 Bitcoin in August, and targets 28 EH/s hashrate by end of Q3 2024.
• AI data centers are projected to consume 85–134 TWh annually by 2027, intensifying competition with Bitcoin mining for power grid capacity.
• Bitcoin mining hashprice sits roughly 40% below pre-halving levels, pressuring smaller operators and accelerating industry consolidation.
• Institutional mining products are expanding rapidly, with EU-compliant security tokens offering a new gateway for non-US investors.

Blockstream Opens BMN2 Series 3 at $31,000 Per Petahash

Blockstream Mining, the mining arm of the Bitcoin infrastructure company co-founded by Adam Back, has opened the third series of its Blockstream Mining Note 2 (BMN2) security token. Priced at $31,000 per petahash per second (PH/s) of hashrate, the offering targets $10 million in investment and runs for three weeks. Two prior rounds of BMN2 raised approximately $7 million combined.

What makes BMN2 stand out in a crowded market of hashrate derivatives is its duration. While most hashrate futures and cloud mining contracts lock in pricing for up to 12 months, the BMN2 gives investors exposure to Bitcoin mining output over a 48-month period. The note is an EU-compliant security token issued through a Luxembourg securitization fund with a designated ISIN, and it trades on the Liquid Network as a fractionalizable digital asset.

The predecessor product, BMN1, mined over 1,242 BTC during its three-year term and delivered returns of up to 103%, according to Stokr, the Luxembourg-based tokenization platform handling the sale. Blockstream says it can offer mining for under 4.5 cents per kilowatt-hour — significantly below the industry average — by operating enterprise-grade facilities that benefit from economies of scale and strategic power procurement.

“With the Bitcoin mining market currently experiencing historically low hashprice levels, BMN2 allows investors to strategically enter the market at an opportune time,” Blockstream stated in its July announcement of the product. Investors in BMN1 were primarily European family offices and funds, though BMN2 is beginning to attract US institutional interest even though the product is not yet offered domestically.

Riot Platforms Surpasses 10,000 BTC Holdings

Riot Platforms (NASDAQ: RIOT) announced on September 5 that it produced 322 Bitcoin in August 2024 and crossed the symbolic threshold of 10,000 BTC in total holdings. The Castle Rock, Colorado-based miner now holds 10,019 BTC — a 37% increase from the same period in 2023 when its reserves stood at 7,309 BTC.

August production was down 13% month-over-month from July’s 370 BTC, a decline attributed to curtailments during Texas’s historically hottest month and unscheduled maintenance at the Rockdale Facility. Riot’s unique power strategy, however, allowed it to generate $6.4 million in total power credits during August, driving all-in power costs down to just 2.6 cents per kWh across its operations.

Riot’s deployed hashrate reached 23.5 EH/s across three sites — Rockdale, Corsicana, and newly acquired Kentucky facilities — with a year-over-year increase of 128%. CEO Jason Les confirmed that Building B1 at the Corsicana Facility, a 100 MW expansion, will be fully operational by the end of September, and the company remains on track for its Q3 target of 28 EH/s and year-end target of 36 EH/s.

The company sold zero Bitcoin during August, reinforcing its HODL strategy that has become a defining characteristic of its balance sheet management. Riot’s average operating hashrate of 14.5 EH/s was up 224% year-over-year, underscoring the massive capacity expansion the company has undertaken despite challenging mining economics.

Bitcoin vs. AI: The Battle for Energy Intensifies

A growing body of analysis highlights an emerging rivalry between Bitcoin mining and artificial intelligence for energy resources. According to projections reported in early September 2024, AI data centers are expected to consume between 85 and 134 terawatt-hours (TWh) of electricity annually by 2027 — potentially surpassing Bitcoin mining’s current consumption of approximately 120 TWh per year.

The Bitcoin Policy Institute’s 2024 report, published in August, examined the dynamics between the two energy-intensive industries and found that Bitcoin mining’s flexibility gives it a unique advantage. Unlike AI data centers that require constant uptime, Bitcoin miners can curtail operations during periods of peak grid demand, effectively acting as a flexible load that stabilizes energy markets. Riot’s power credit strategy in Texas exemplifies this approach.

However, the competitive pressure is real. Several major mining operators are already exploring hybrid models that repportion portions of their power capacity toward AI and high-performance computing. The shift is driven by the substantially higher revenue per megawatt that AI computing commands compared to Bitcoin mining, especially in the post-halving environment where hashprice has declined roughly 40% from pre-April levels.

VanEck’s mid-September Bitcoin ChainCheck report noted that seven nations are now mining Bitcoin with direct government support, adding a geopolitical dimension to the energy competition. As sovereign actors enter the mining space, the dynamics of global energy allocation between digital asset extraction and AI infrastructure will become an increasingly important policy consideration.

Mining Economics Under Pressure

The backdrop to all of these developments is a mining industry operating under significant margin pressure. JPMorgan reported in August 2024 that Bitcoin mining hashprice was approximately 30% below September 2022 levels and roughly 40% below the level before April’s halving event, which reduced the block subsidy from 6.25 to 3.125 BTC.

This compression is driving a bifurcation in the industry. Well-capitalized public miners like Riot, CleanSpark, and MARA are aggressively expanding their hashrate footprints — CleanSpark grew from 9.6 EH/s to 27.6 EH/s over the past year, while MARA produced 705 BTC in September with 207 blocks won. Meanwhile, smaller operators without access to cheap power or institutional capital are being squeezed out, accelerating industry consolidation.

The creative financialization of mining exposure through products like Blockstream’s BMN2 represents one response to this environment. By offering fixed-cost mining exposure over multi-year horizons, these instruments allow investors to bet on Bitcoin’s long-term price appreciation while hedging against the operational risks and capital expenditure requirements of direct mining.

Why This Matters

The convergence of institutional mining products, corporate treasury accumulation, and the AI energy rivalry signals a maturing Bitcoin mining industry that is increasingly intertwined with traditional finance and broader technology infrastructure. Blockstream’s BMN2 Series 3 launch demonstrates that sophisticated investors see value in long-dated mining exposure even at historically low hashprices — a contrarian bet that Bitcoin’s price will rise sufficiently to make today’s mining economics look attractive in retrospect.

Riot’s crossing of the 10,000 BTC threshold puts it in rarified company among public miners, and its continued HODL strategy mirrors the approach that has served MicroStrategy well. The company’s ability to generate substantial power credits during peak demand periods highlights an underappreciated aspect of Bitcoin mining: when properly structured, mining operations can provide genuine grid flexibility services rather than simply being energy consumers.

Perhaps most significantly, the emerging AI-mining energy competition foreshadows a decade-long tension. As AI compute demand grows exponentially and Bitcoin mining continues to professionalize, both industries will compete for the same cheap power sources, the same grid interconnection points, and the same regulatory approvals. The miners that survive will be those that can demonstrate flexibility, efficiency, and value to the grid — or those that pivot to serve both markets simultaneously.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Bitcoin mining involves significant risk, including hardware costs, energy price volatility, and regulatory uncertainty. Always conduct your own research before making investment decisions.