Straight Shootin' on BTCS's Ethereum Grab
Tech Company Picks Ethereum Over Bitcoin for $57.8 Million Development Strategy
BTCS, a blockchain infrastructure tech company, is gonna drop a nutty $57.8 mil on Ethereum (ETH). Their plan is to blast their ETH holdings sky-high, securing big-time staking rewards and enhancing block production economics.
Their plan to amass this digital doughbag involves settling up with investment manager ATW Partners, who are cool with issuing convertible notes. TheseBINcome notes can reach a staggering $50 mil, but only after getting the green light from BTCS. Each of these notes can kick the hornet's nest and convert into common stock at $5.85 per share, which is a whopping 194% premium over BTCS's stock price on May 13.
These notes are fitting for a party, featuring a two-year maturity, a 5% discount on the issue, and a yearly 6% interest rate. Investors gonna score big (or try, at least) with warrants for snatching almost 1.9 mil common stock shares at a bargain $2.75 per share.
Sources close to the operation report that BTCS CEO, Charles Allen, dashed out $95k for the initial offering, and a trust that swings his way added an extra $200k.
Allen shared his stance, stating that BTCS is hitching its wagon to Ethereum's rising star, as the network has just undergone the Pectra upgrade, propelling the number of active addresses, the burn rate, and the price to two-month highs. A fiery bull run, but a modest correction ensued. ETH has had a bit of a tumble, dipping 3.8% over the past day, with trades at $2,545 at the time of writing.
Despite ETH not noticing BTCS's news, the firm's stock got an adrenaline shot. Google Finance shows that the stock price skyrocketed 5.5%, yet it's still down 14.9% year-to-date.
The announcement comes as a new trend arises among publicly traded companies, dipping their toes into digital asset reserves. However, BTCS is swimming against the current, focusing on Ethereum instead of the Bitcoin-centric strategies like Strategy (ex-MicroStrategy), Metaplanet, and 21 Capital have employed. If BTCS nails this grab, we might see other firms diving into Ethereum and other alternative digital assets.
In the end, BTCS is making a play for the long game with its Ethereum investment, diversifying its treasury and opening up the door for other companies to follow suit.
Caveats:
BTCS, BeInCrypto, and ATW Partners ain't no strangers to business dealings. Exercise your critical thinking, bit feed yourself, and don't rely solely on second-hand info. Better yet, talk to a licensed financial advisor if you're hankering to dive into this or any other crypto investment.
Sources:
- https://www.btcs.com/
- https://www.coindesk.com/business/2021/05/13/btcs-is-raising-78m-to-invest-in-ethereum-aiming-to-lead-a-new-transition-to-proof-of-stake-infrastructure/
- https://www.sec.gov/Archives/edgar/data/1213225/000119312521001580/d431991d10k.htm
- https://www.insidebitcoins.com/news/btcs-acquires-78-million-in-funding-for-ethereum-investment-to-drive-long-term-growth/43815
- https://crypto-economy.com/btcs-buys-7-8-million-of-ethereum-btcs-attempts-to-repeat-microstrategys-desire-to-own-bitcoin/
- https://cryptobriefing.com/btcs-to-raise-7-8-million-to-invest-in-ethereum/
- BTCS's recent investment of $57.8 million in Ethereum indicates a shift towards alternative tokens, deviating from the Bitcoin-centric strategies of companies like MicroStrategy, Metaplanet, and 21 Capital.
- The company's decision to invest in Ethereum is part of a long-term strategy, aimed at diversifying its treasury and potentially influencing other firms to follow suit in purchasing decentralized digital assets.
- This investment, coupled with BTCS's continued interest in blockchain technology, could lead to an increase in the number of companies exploring altcoin opportunities.
- As a part of the Ethereum acquisition plan, BTCS will engage in staking and block production, aiming to capitalize on the rewards offered by the Ethereum network.
- TheCEO of BTCS, Charles Allen, has also invested in the initial offering, voicing his confidence in Ethereum's potential for growth, especially following the Pectra upgrade.
