Bitcoin development firm Blockstream has announced the launch of three investment funds, including two focused on cryptocurrency lending.
The firm, co-founded by Bitcoin pioneer Adam Back, will introduce a fund that underwrites Bitcoin-backed loans and another that facilitates crypto borrowing using U.S. dollars as collateral.
A third fund will employ hedge fund strategies, according to a company statement released on Tuesday. The funds are set to go live in April, with external capital expected to be accepted starting in July.
Blockstream’s Strategic Move into Crypto Lending
Blockstream’s expansion into crypto lending comes at a time of rising Bitcoin prices and a more favorable regulatory environment under the pro-crypto stance of President Donald Trump’s administration.
The company has secured substantial funding, reportedly in the billions, to support these initiatives, as first reported by Bloomberg. Blockstream had previously raised millions through debt financing in early 2024.
Crypto lending suffered a severe downturn following the collapse of FTX, which left a trail of bankruptcies, including those of major lenders Genesis Global Capital and BlockFi.
The failure of these firms resulted from exposure to FTX’s fraudulent operations, which rendered them unable to recover funds. As a result, liquidity providers exited the market, leaving a gap that firms like Blockstream now seek to fill.
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