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Saturday, November 26, 2022

Volatile Moves on Bitcoin Shop Inc (OTCMKTS:BTCS)

Bitcoin Shop Inc (OTCMKTS:BTCS) has been showing some strength over its $0.05 support level established after the 1 for 60 reverse split the stock saw in February.

The last move on BTCS came after the Company said they were able to convince all of the note holders to agree to a standstill and leak-out agreement whereby, until September 19, 2016, 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.

Bitcoin Shop Inc (OTCMKTS:BTCS) secures the blockchain through its rapidly growing 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 and build 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.

BTCS originally began operations focused exclusively on the Bitcoin ecosystem but plans to evaluate broader opportunities in blockchain consumer solutions. According to recently published research from Goldman Sachs, the real opportunity lies in the underlying technology of Bitcoin, the blockchain. Referred to as the golden egg, the blockchain can not only live outside of Bitcoin, it has the potential to streamline a multitude of businesses.

BTCS current transaction verification operation touches every blockchain transaction. Even after doubling their server processing power in January of 2016, the Company is currently using just 33% of the expanded power capacity added in July 2015. The foundation to rapidly scale operations is in place.

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BTCS recently announced the coming merger with Israeli based Spondoolies-Tech; a transaction verification server manufacturer. Spondoolies raised ten million dollars in capital from leading Israeli venture capital firms and assembled a team of leaders in the Israeli Semiconductor industry, with the goal of building the infrastructure on which digital currencies will flourish. Building digital currency transaction verifying servers from the bottom up, Spondoolies is producing machines that are designed for efficiency and performance. During 2014, Spondoolies successfully launched five different products.

According to the agreement after giving effect to BTCS’s recent $750,000 investment in Spondoolies, BTCS shareholders will own a 69.7% to 61.2% stake in the combined company, and Spondoolies shareholders will own 30.3% to 38.8% of the combined company, based on the number of common and preferred securities outstanding immediately following the merger. The ownership range is a function of BTCS’ liquidation preference associated with its existing $2.25 million investment in Spondoolies. The final ownership percentages will be determined prior to closing.

Last year the Company said it increased its Ethereum-mining hosting business to approximately 150 kilowatts (“kw”), up from approximately 50kw announced in March 2016.

“We have gained valuable expertise since launching our Ethereum pilot program in March,” stated Charles Allen, CEO of BTCS. “Ethereum has rocketed to nearly 20% of the market cap of Bitcoin in less than two years, led by rapid adoption and growing support from major players in tech and finance including Gemini and Coinbase (which just rebranded to GDAX). We believe our experience, in connection with additional capital, should allow us to further expand our Ethereum mining and hosting businesses, to diversify our exposure to bitcoin, and to use more of our available power capacity.”

Ethereum is a digital currency and blockchain platform focused on smart contract applications. Like bitcoin-based blockchain technologies, the decentralized network of Ethereum enables transactions without downtime, censorship, fraud, or third-party interference. Year to date, the value of Ether, the digital token or fuel that powers the Ethereum network, in USD terms, has grown over 1,300% the total value of all Ether, or market cap of Ether, surpassing $1 billion.

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Currently trading at a $6.7 million market valuation BTCS has suffered in recent months as massive dilution ruled the day. The stock is beginning to make a comeback after the Company announced they were able to convince all of the note holders to agree to a standstill and leak-out agreement limiting the number of shares they can convert on a given day. On the positive side the Company’s balance sheet has improved significantly and the they continue to put out some big press including the completion of a $1.45 million capital raise in December 2015, 1,225% year-over-year revenue growth for the fiscal year ended 2015. 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.

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