Ben Strack

<div id="highlights-block_633ec61504c8d" class="highlights">
 <ul>
 <li>Grayscale anticipates mining equipment to become available at “distressed levels” in coming months</li>
 <li>Firm is set to use hardware to mine and sell bitcoin daily</li>
 </ul>
 
</div>



A new private co-investment product from Grayscale Investments is designed to allow investors to gain exposure to mining hardware as it seeks to capitalize on buying opportunities in the distressed segment.&nbsp;



Capital raised by The Grayscale Digital Infrastructure Opportunities LLC (GDIO) will mainly be used to purchase mining hardware, according to Rayhaneh Sharif-Askary, Grayscale’s head of investor relations. GDIO will employ its hardware by seeking to mine and sell bitcoin daily and will look to distribute a portion of its operating income to investors quarterly, she added.



The investment vehicle is available to eligible individual and institutional accredited investors.



After three years of operation — but no later than five years — GDIO will seek an exit strategy, which may include a disposition of its assets.



The product is designed to capture upside, the company said, amid the so-called crypto winter — a period that <a href="https://cms.blockworks.co/crypto-bear-market-may-drag-on-another-8-months-grayscale/" target="_blank" rel="noreferrer noopener">Grayscale researchers said in a July report</a> could last another eight or so months.



Bitcoin mining has become less profitable in recent months, as bitcoin’s price has fallen about 70% from its all-time high reached last November. Some mining companies <a href="https://cms.blockworks.co/crypto-mining-strategies-differs-as-downturn-lingers/" target="_blank" rel="noreferrer noopener">have resorted to selling bitcoin</a> to help cover operational and other expenses. 



“In the coming months, we anticipate mining equipment will become available for purchase at distressed levels,” Sharif-Askary told Blockworks.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“GDIO will have an opportunity to provide liquidity to the mining ecosystem, purchasing mining equipment at an optimal time in the mining cycle to profitably mine bitcoin in the future,” she said.</blockquote>



Grayscale, a subsidiary of Digital Currency Group (DCG), manages $17.6 billion in assets. Crypto mining and staking firm Foundry, a fellow DCG affiliate, is set to manage operations of GDIO.



Foundry provides financing for bitcoin mining equipment and access to equipment manufacturers.



“As part of Foundry’s mission to empower a decentralized infrastructure, we’re excited to partner with Grayscale to broaden the ability to invest in bitcoin mining during this opportune time,” Foundry CEO Michael Colyer said in a statement.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Grayscale Unveils Mining Hardware Exposure Via Private Product

<div id="highlights-block_618c1c38d6a31" class="highlights">
 <ul>
 <li>Foundry has been staking parent company Digital Currency Group’s assets for more than a year in preparation for the launch</li>
 <li>Staking will be “a must-offer service” for exchanges, wallet providers, banks and custodians, according to Foundry’s vice president of product development</li>
 </ul>
 
</div>



Digital Currency Group affiliate Foundry Digital is launching a staking business and other services designed for exchanges, banks and other institutions, it announced Wednesday.&nbsp;



The new business, Foundry Staking, has a range of services covering 20 blockchain networks including Solana, Helium, The Graph, and Horizen, the company said on Wednesday.



Founded in 2019 and based in Rochester, New York, Foundry has operated mainly in proof-of-work networks such as Bitcoin. Proof-of-stake (PoS) is the process of allowing participants to lock in their tokens for a certain amount of time to become eligible to generate the next block in the blockchain and receive staking rewards.&nbsp;



PoS systems are also very important to its mission of decentralizing infrastructure, Joe Hoffend, vice president of product development at Foundry said.



Foundry has been staking Digital Currency Group’s assets for more than a year and has built up the necessary infrastructure and expertise to confidently offer the services to institutions, Hoffend told Blockworks.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“We are also seeing institutions becoming more comfortable in how they think about offering staking services to their customers or staking their own digital assets as part of more sophisticated portfolio strategy,” he said. “And we know we can be a trusted resource for those looking to get involved,” Hoffend added.  </blockquote>



Foundry is entering the staking space as PoS protocols have seen massive growth.&nbsp;&nbsp;



Staked <a href="https://cms.blockworks.co/staking-is-an-18-billion-industry-says-staked/" target="_blank" rel="noreferrer noopener">reported last month</a> that the market capitalization of the top 30 PoS protocols totaled $594 billion as of September 30, representing a 65% increase from the second quarter.



Konstantin Richter, founder and CEO of blockchain infrastructure platform Blockdaemon, <a href="https://cms.blockworks.co/blockdaemon-ceo-staking-and-lending-will-make-defi-mainstream/" target="_blank" rel="noreferrer noopener">said last month</a> that he predicts the market size of crypto to expand three to four times due to the evolution around liquid staking, lending and decentralized finance (DeFi). He added that he expects the full merge of <a href="https://cms.blockworks.co/?s=Ethereum+2.0" target="_blank" rel="noreferrer noopener">Ethereum 2.0</a>, which is transitioning from proof-of-work to PoS, to happen during the first quarter of 2022. 



“For any institution holding client funds, such as exchanges — both traditional finance and crypto-native — wallet providers, banks, and custodians, [staking is] going to be a must-offer service soon, if not already,” Hoffend said. “With venture capital firms and hedge funds, it’s a way to earn rewards on the assets they already hold,” he added.&nbsp;



Foundry will work with digital asset prime brokerage<a href="https://c212.net/c/link/?t=0&amp;l=en&amp;o=3353704-1&amp;h=3880081555&amp;u=https%3A%2F%2Fgenesistrading.com%2F&amp;a=%C2%A0"> </a><a href="https://c212.net/c/link/?t=0&amp;l=en&amp;o=3353704-1&amp;h=1526965863&amp;u=https%3A%2F%2Fgenesistrading.com%2F&amp;a=Genesis" target="_blank" rel="noreferrer noopener">Genesis</a>, another Digital Currency Group subsidiary, to provide its clients with high-security custody, insight for treasury management, staking strategies and portfolio diversification.



“We will continue adding new staking protocols over time,” Hoofend said, “as well as several adjacent offerings that make sense for both our proof-of-work and proof-of-stake customers.”

Foundry Digital Launches Staking Business as Institutions Become Comfortable

Morgan Chittum

<div id="highlights-block_60f1e3ca4e16a" class="highlights">
 <ul>
 <li>The upstate New York mining firm, which formerly sparked controversy for its mining expansion plan, wants to reduce bitcoin’s impact on the environment</li>
 <li>“There&#8217;s a definite righteous and rightful shift towards environmental and impact awareness in the mining community,” said Garrette David, an advisor to Regen Network</li>
 </ul>
 
</div>



U.S.-based bitcoin miners continue their push for an ESG-minded business model as Greenidge Generation Holdings said it will acquire 8,300 bitcoin mining rigs via a new partnership with Foundry Digital, in hopes to reduce its environmental impacts and diversify its energy sources, according to a joint <a href="https://www.prnewswire.com/news-releases/greenidge-partners-with-foundry-to-expand-bitcoin-mining-fleet-with-latest-generation-mining-machines-301333040.html">press release</a>.



Greenidge is set to buy 2,300 WhatsMiner M30S mining rigs and will acquire 6,000 Antminer S19 machines in a financing deal through Foundry Digital, which is a cryptocurrency mining and staking-focused subsidiary of Digital Currency Group. They will also join the Foundry USA <a href="https://cms.blockworks.co/heres-why-institutions-are-flocking-to-bitcoin-mining/" target="_blank" rel="noreferrer noopener">bitcoin mining pool</a>, according to the release.



&#8220;Foundry has been a longtime hosting customer of Greenidge and this partnership expands our existing relationship as Greenidge grows outside of New York,&#8221; said CEO of Greenidge, Jeffrey Kirt.



The upstate New York mining firm, which formerly <a href="https://www.coindesk.com/upstate-ny-bitcoin-miner-greenidge-to-offset-rigs-carbon-emissions">sparked controversy</a> for its mining expansion plan, wants to reduce bitcoin’s impact on the environment. The company said it wants to counteract emissions from rigs with carbon offset credit purchases.



&#8220;Greenidge has pioneered the integration of a clean power plant operation and carbon-neutral cryptocurrency mining in North America with its operation in Upstate New York,&#8221; said Mike Colyer, CEO of Foundry.&nbsp;



In a year where ESG concerns have dominated headlines, this is one of many public moves to help bitcoin miners lower their energy usage. 



“There&#8217;s a definite righteous and rightful shift towards environmental and impact awareness in the mining community,” said former miner and advisor to Regen Network, Garrette David to Blockworks.&nbsp;



A California nuclear energy provider, Oklo, aims to produce clean energy through advanced fission and <a href="https://www.businesswire.com/news/home/20210714005433/en/Oklo-and-Compass-Secure-20-Year-Commercial-Partnership-to-Launch-Advanced-Fission-Powered-Bitcoin-Mining">announced</a> a 20-year partnership with Compass Mining on Wednesday. 



Bitcoin is “a huge market opportunity for clean energy generation,” Oklo CEO Jacob DeWitte said in an interview with <a href="https://www.crainscleveland.com/energy-and-environment/bitcoin-miners-seek-go-nuclear-address-environmental-woes">Crain’s Cleveland</a>. Along the same lines, Energy Harbor also partnered with Standard Power to provide carbon-free nuclear power to bitcoin miners at a data center in Ohio, according to a <a href="https://www.prnewswire.com/news-releases/energy-harbor-partners-with-standard-power-to-provide-carbon-free-nuclear-power-to-new-ohio-bitcoin-blockchain-mining-center-301331473.html">statement</a> this week.