BTCS Inc (OTCMKTS:BTCS) Correlation Being Realized by the Market

BTCS Inc (OTCMKTS:BTCS) is finally starting to show the type of movement we have been looking for. The cryptocurrency space has been in full-out bubble territory for the past two months. But bubbles take a while to reach full ripe maturity and then begin an inevitable unraveling. Our philosophy is this: there is often a stage of delusional excitement, where the crowd makes unnamed excuses in service of continuing the game. This can go on for far longer than one might expect. And it’s best to play the game rather than sit in judgment of it the whole way up.

In the case of BTCS, we reported back in October that the stock should begin to play catch-up at some point given that its latest funding round included some funding to be held on the balance sheet in the form of Bitcoins. Those coins at this point have increased in value from around $250k to nearly $1M. That is finally beginning to be incorporated in share prices.

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 Company’s universal digital currency platform.

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. The company 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.

BTCS operates a beta eCommerceE marketplace. It hosts an online ecommerce marketplace where consumers could purchase merchandise using digital currencies, such as bitcoin, litecoin, and dogecoin. The company was formerly known as Bitcoin Shop, Inc. and changed its name to BTCS Inc. in July 2015. BTCS Inc. was founded in 2013 and is headquartered in Arlington, Virginia.

According to the company, BTCS is an early entrant in the Digital Asset market and one of the first U.S. publicly traded companies to be involved with Digital Assets and blockchain technologies. Subject to additional financing, 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. On October 25, 2017, the company announced it has closed on the remaining balance of its previously announced financing, which was co-led by Blockchain Global Ltd. The Company received a total of $1.1 million from the sale of its Series C -1 Convertible Preferred Stock and Warrants.

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As noted above, we discussed in October that BTCS had effectively a call option contract on the BTC action that would likely pay off over time. It may be that this factor is finally beginning to be appreciated by investors.

As we said back in October, “Frankly, if you want to increase correlation with Bitcoin, just hold your assets in Bitcoins and sit on them. Taking a quarter million in financing in the form of Bitcoin should help to heal the divide. However, investors would be wise to remember that knife cuts both ways going forward.”

This is still the case today.

Earning a current market cap value of $78.6M, BTCS has virtually no cash on the books, which must be weighed relative to virtually no total current liabilities. BTCS is pulling in trailing 12-month revenues of $20K. However, the company is seeing declines on the top-line on a quarterly y/y basis, with revenues falling precipitously in recent action. You can bet we will update this one again as new information comes into view. Sign-up for continuing coverage on shares of $BTCS stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $BTCS, either long or short, and we have not been compensated for this article.