BTCS Inc(OTCMKTS:BTCS) has been making an explosive move up in recent days as cryptocurrency markets have recovered across the board. The stock has a long history of volatility between a dime and $0.40 exploding to $0.578 in August.
BTCS is up as Bitcoins price has recovered in recent days. The cryptocurrency markets had collapsed in recent weeks as well as the price of Bitcoin after China announced a ban on on initial coin offerings (ICOS) in early September. Bitcoin hit a low of $2,981 after news on September 15 that bitcoin exchanges were shutting down following directives from government officials but has been rallying since then surpassing $4000 again yesterday according to CoinDesk’s Bitcoin Price Index.
BTCS Inc(OTCMKTS:BTCS) describes itself as an early mover in the blockchain and digital currency ecosystems and the first “Pure Play” U.S. public company focused on blockchain technologies. BTCS goal is to enable users to engage in the digital currency ecosystem through one point of access – the Companys universal digital currency platform. As a firm believer in the blockchain technology, we offer various solutions including Bitcoin Shop – our ecommerce store which accepts a variety of digital currencies, BTCS Wallet – our secure storage solution and more. We deliver each solution by leveraging innovative technologies. We also leverage the services offered by our strategic partners. To date we have made investments in and partnered with 4 key digital currency companies including: GoCoin, Gem, Expresscoin, and Coin Outlet.
BTCS plans to create a portfolio of digital assets including bitcoin and other “protocol tokens” to provide investors a diversified pure-play exposure to the bitcoin and blockchain industries. BTCS intends to acquire digital assets through: open market purchases, participating in initial digital asset offerings (often referred to as initial coin offerings). Additionally, BTCS may acquire digital assets by resuming our transaction verification services business (often referred to as mining) through outsourced data centers and earning rewards in digital assets by securing their respective blockchains. BTCS is also keenly focused on growth through acquisition. 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.
On August 21 BTCS announced it signed a non-binding Letter of Intent (“LOI”) to merge with Blockchain Global Limited (“BCG”), an Australian blockchain company, which will be subject to a number of conditions detailed at the end of this press release.
BCG operates four distinct business lines, an institutional exchange platform, transaction verification services (bitcoin mining), a blockchain start-up accelerator, and a blockchain technology consultancy. BCG generated AU$5.9 million (approximately US$4.4 million) revenue in FY16, a 300% increase over FY2015 revenue. BCG has approximately US$3.5 million in assets comprised of bitcoin and cash as of July 1, 2017, and is currently supporting its business through profit from operations. The reported revenues are audited in accordance with International Financial Reporting Standards and are financial measures not calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). See the section below under “Non-GAAP Financial Measures”.
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BCG wholly owns and operates ACX.io, an Australian Bitcoin Exchange and liquidity provider. Leveraging BCG’s asset security, exchange IP, and a proprietary liquidity engine, ACX provides a process to buy and sell bitcoin. Further, through ACX, BCG operates a proprietary arbitrage engine which captures a spread across multiple liquidity pools.
BCG currently owns approximately 6 petahash (“PH”) of mining capacity in a purpose-built outsourced facility in China. BCG’s China operation has access to electricity at approximately US$0.04/kwh.
BCG also provides blockchain technology advisory services including the preparation and support of crowd-sourced Blockchain token sales and Initial Coin Offerings.
BCG complements its core business operations with a novel start-up accelerator program targeted at companies that are developing innovative blockchain technologies and applications. Through BCG’s Melbourne Blockchain Center, a 6,000 square-foot leased facility launched in late 2014 and located in the heart of Melbourne, BCG has played a role in accelerating the development of a number of companies. BCG typically retains an equity stake in the companies it incubates and/or receives a licensing agreement or other economic incentive.
BCG CEO Sam Lee stated “As early movers in a rapidly developing industry, we’ve assembled a talented team with the necessary expertise to excel. In addition to our work with innovative companies, through the Melbourne Blockchain Center, we’ve also positioned ourselves to be a leading consultant in the space, servicing companies that recognize the importance of incorporating blockchain technology into their organizational strategies. By teaming up with BTCS, we’re deepening our pool of talent.”
“The blockchain space continues to suffer from a talent void,” commented Charles Allen, CEO of BTCS. “Together with BCG, and their track record of success, we’re positioning ourselves to fill this talent void, ultimately capitalizing on the immense opportunity in blockchain technologies and leveraging our early-mover advantage.”
The LOI is subject to a number of conditions including approval of BCG’s shareholders and board and the approval of BTCS’s board, and the settlement of all of BTCS’ debt prior to closing. Another key condition of the LOI is that the existing holders of BTCS securities which have anti-dilution protection, redemption features and similar protections must be eliminated as determined solely by BCG. The LOI also provides that the two current executive officers of the Company will receive 12% of the Fully Diluted Equity in the form of common stock, preferred stock or restricted stock units in a manner to be determined by the Company.
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Currently trading at a $22 million market valuation BTCS has minimal assets or revenues and rising debt that has caused significant dilution here in the past. But BTCS is an exciting story developing in small caps; the Company is as an early mover in the blockchain and digital currency ecosystems and the first “Pure Play” U.S. public company focused on blockchain technologies. The LOI announced with Blockchain Global Limited (“BCG”) could be huge for shareholders as BCG already does significant sales and already has a large footprint in the crypto space with its institutional exchange platform, transaction verification services (bitcoin mining), a blockchain start-up accelerator, and a blockchain technology consultancy. A breach of the $5,000 mark and bitcoin could go parabolic again and take any bitcoin related stocks with it. We will be updating on BTCS when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with BTCS.
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Disclosure: we hold no position in BTCS either long or short and we have not been compensated for this article.