Digital asset infrastructure company Blockstream has raised $125 million to finance its Bitcoin (BTC) mining colocation services, underscoring heightened demand for its institutional hosting services amid the bear market. 

The $125 million raise was financed by convertible note and a secured loan, Blockstream announced on Jan. 24. Venture capital firm Kingsway Capital led the convertible note raise, with additional participation from Fulgur Ventures. Cohen & Cohen Capital Markets, part of J.V.B. Financial Group, advised Blockstream on the deal.

The funding will enable Blockstream to expand mining capacity for institutional hosting customers — a segment the company said was “resilient” in the face of Bitcoin price volatility compared to so-called prop miners. This latter segment is “more directly exposed to Bitcoin price volatility and compressed margins,” Blockstream said.

“We remain focused on reducing risk for institutional bitcoin miners and enabling enterprise users to build high-value use cases,” said Erik Svenson, Blockstream’s president and chief financial officer.

Related: BlockFi to sell $160M in Bitcoin miner-backed loans: Report

A protracted bear market in crypto, punctuated by several high-profile bankruptcies that culminated in the FTX collapse, placed significant pressure on Bitcoin miners. In December, Bitcoin mining giant Core Scientific filed for 11 bankruptcy due to plunging revenues.

Mining operation Greenridge avoided bankruptcy in December by receiving a $74 million lifeline from New York Digital Investment Group.

As reported by Cointelegraph, Bitcoin miners’ worst days may have passed as hashrate stabilized and profit margins gradually improved toward the end of 2022. However, the industry remains under pressure, especially for small- and mid-sized miners with breakeven prices above $25,000 BTC.