BITCOIN Svcs In/SH SH (OTCMKTS:BTSC) continues to make truly insane moves as traders pile into anything blockchain-related or crypto-related in equities. If you look at traditional fundamentals, it doesn’t make much sense, so you have to view it purely as a momentum trade and follow the technicals. In this case, BTSC shares are beginning to show some signs of working into a symmetrical triangle pattern of extraordinarily wide berth, with the stock now sitting more or less right in the middle of its recent range.
We very rarely hear from this company, so individual company information very rarely seems to come into the picture with this one. That may be to its benefit because it has become something working as a proxy instrument for bitcoin, which is in what is being touted as perhaps the biggest market bubble in history at present. We will look at this more below, but let’s first take a look at this company from a birds eye view.
BITCOIN Svcs In/SH SH (OTCMKTS:BTSC) bills itself as a company engaged in the mining of Bitcoin as well as Blockchain software development. Bitcoin mining is the process by which transactions are verified and added to the public ledger, known as the blockchain, and also the means through which new Bitcoins are released.
According to BTSC press materials, “Our business operations are Internet based to the consumer and consist of two separate streams, as follows: (1) bitcoin mining, and (2) blockchain software development. The principal products and services are the mining of bitcoins, and the development and sale of blockchain software. The market for these services and products is worldwide, and sold and marketed on the Internet.”
BTSC is focused on bitcoin mining which is legal and is accomplished by running SHA256 double round hash verification processes in order to validate Bitcoin transactions and provide the requisite security for the public ledger of the Bitcoin network. The speed at which you mine Bitcoins is measured in hashes per second. The Bitcoin network compensates Bitcoin miners for their effort by releasing bitcoin to those who contribute the needed computational power. This comes in the form of both newly issued bitcoins and from the transaction fees included in the transactions validated when mining bitcoins.
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As mentioned above, BTCS has been working as a Bitcoin proxy instrument in part because the company very rarely releases any details about its operations or fundamentals. The trading crowd has picked it up as a play on the crypto space, and the company isn’t saying anything to dissuade that system of assumptions.
As far as the bubble risk in Bitcoin itself – which then must be the greatest risk for shareholders of BTSC – a quick survey of financial media inputs will quickly show what the so-called experts believe. With headlines like “Bitcoin is the Most Perfect Bubble Ever”, “Bitcoin Passes Tulips, Biggest Bubble in World History”, “Is Bitcoin the Biggest Bubble of All Time?”, and the like, it’s not difficult to imagine what the conventional finance industry believes about how safe current price levels are.
However, that could be the most important point of all: sentiment on Bitcoin is negative at current prices. Typically, crash risk is defined by too much bullish sentiment. That suggests we may still have further to go in this climb, further suggesting that companies like BTSC may be on stronger footing than what it may at first appear.
Earning a current market cap value of $202.8M, BTSC has a reserve ($345K) of cash on the books, which must be weighed relative to virtually no total current liabilities. BTSC is pulling in trailing 12-month revenues of $346K. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 305%. We will update the story again soon as developments transpire. Sign-up for continuing coverage on shares of $BTSC 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 $BTSC, either long or short, and we have not been compensated for this article.