Monday, June 27, 2022

BTCS Inc (OTCMKTS:BTCS) a Weather Vane on Cryptocurrency

BTCS Inc (OTCMKTS:BTCS) has been the beneficiary of strong Bitcoin movement and an aggressive media cycle now invested in following the cryptocurrency. As news of Bitcoin and Ethereum make headlines, the investing public begins the process of finding stocks that are related to the digital currency.  Much of the chase of these stocks is due to the fact that investors will not trade a new market (like digital currency) and will rely on OTC stocks or larger listed stocks like BTCS.

Even this time last year, the action was hot and heavy and BTCS needed to make some remarks around the volatility around its common shares on the U.S. over-the-counter market. In 2016, BTCS relied on convertible note financing to fund ongoing operations. As a result of not completing an additional larger round of financing, BTCS was unable to meet the repayment terms of the notes issued in December. This has led to the conversion of almost $600,000 of notes and interest to shares of the company’s common stock.

BTCS Inc (OTCMKTS:BTCS) was able to convince all of the note holders to agree to a standstill and leak-out agreement. Each note holder’s daily conversions will be limited to the greater of: (1) $7,500, and (2) five percent of the aggregate dollar value of Common Stock traded during the trading day immediately prior to the conversion date. Full details of the leak-out agreement are available in the Company’s 8-K filed with the Securities and Exchange Commission on June 22, 2016.

While news of the conversion has had a deleterious effect on the BTCS’ share price, management remained committed to executing on its strategic plans. See this quote from a year ago:

“Blockchain technologies are still in their infancy, much like the early days of the Internet, and we firmly believe the potential moving forward remains great,” stated Charles Allen, CEO of BTCS. “We’re further encouraged by the recent price increase of bitcoin, which demonstrates the continued maturation of digital currencies.”

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BTCS secures the blockchain through its transaction verification services business and plans to build a broader ecosystem to capitalize on opportunities in this fast growing industry. The blockchain is a decentralized public ledger and has the ability to fundamentally impact all industries on a global basis that rely on or utilize record keeping and require trust. BTCS continues to evaluate additional blockchain technology consumer solutions. BTCS also actively partners and integrates with strategic digital currency and blockchain technology companies who provide products or services that are complementary to its business strategy.

When share prices have the volatility BTCS experiences, it raises alarms for the companies who don’t feel like they are in control of the float. In addition, it also tweaks regulators when large players come in, have their way with the stock pushing it up and down and then exit. These short term players who rent the shares are the enemy of the long-term shareholder. The company is constantly doing the smart thing by talking to the press about how they perceived the price volatility and what they were doing to protect the long term holders. This helps dampen the impact of traders who often can leave scorched earth behind them.

BTCS Inc (OTCMKTS:BTCS) is in the hottest sector on Wall Street. Bottom line, any public company who participates in Bitcoin, Ethereum or Blockchain solutions will benefit from an investor base who prefer to trade OTC stocks versus entering the digital currency realm. As an investor this is a critical footnote, and once the imposters exit the stock, the long-term holders take the place of the short-term players. But make no mistake, BTCS can be a useful weather vane determining investor adoption of digital currency and blockchain for traders of small public companies. For continuing coverage on shares of $BTCS stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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