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BITCOIN Svcs In/SH SH (OTCMKTS:BTSC) Pays The Price On Bitcoin Overdependence

BITCOIN Svcs In/SH SH (OTCMKTS:BTSC) Pays The Price On Bitcoin Overdependence
Written by
Ryan Mitchell
Published on
February 8, 2018
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A few months back, the cryptocurrency space was on a roll, as digital currencies touched record highs. Companies with stakes in the space saw their share price receive a boost as they also clocked levels, not seen in years. BITCOIN Svcs In/SH SH (OTCMKTS:BTSC) is one of the stock that appears to have run too fast ahead of its fundamentals and is currently paying a hefty price.The stock has since plummeted from record highs of $0.64 and is currently languishing in the sub $0.11 trading range. Late last year, the stock tried to make a comeback rising to the $0.25 handle but found strong resistance. SYMB Daily ChartBTSC is now at risk of dropping to its 52-week low of $0.9 a share if a recent sell-off that has gripped the industry is anything to go by. Bitcoin, a cryptocurrency that accounts for a huge chunk of the company’s business portfolio, has dropped from record highs of $20,000 to below the $8,000 mark and in the process had a ripple effect on BTSC Inc.The implosion is already begging the question whether BTSC will continue to edge lower as investors shun the space.Before we look at what the future holds for BTSC, it would be important to first understand what the company does in its pursuit of a value proposition.BTSC Business DescriptionBTSC bills itself as an early entrant in the digital asset market and one of the first public company to invest in blockchain technologies. The company is in the process of building a portfolio of digital assets as part of its core business of providing investors, a diversified pure play exposure to bitcoin and the larger blockchain industry.The company also claims to be actively focused on pursuing growth through pursuing acquisition targets that have the potential to expand its footprint in the industry.Cryptocurrencies Uncertainty BTSC finds itself in a tricky situation given that it is a pure bitcoin and blockchain play. While there’s no doubt about, blockchain technology capabilities, concerns about digital currencies remains a hot subject in the wake of the recent sell-off.With bitcoin having lost nearly 40% of its total market value in a span of one month, investors are starting to question whether it is the right time to call it quits in the space. BTSC rose to the limelight as investors sought indirect exposure to the cryptocurrency space.Investor sentiments about cryptocurrencies turning sour have gone a long way in affecting the stock’s sentiments in the space.Early this year BTSC issued an update to shareholders highlighting how its performance over the past year validated its original business thesis. The company started 2017 with a $45.3 million in total liabilities and $98 in assets.Thanks to capital raises and debt restructuring, the company has been able to significantly improve its financial position. The company exited 2017 with no debt and approximately $303k in cash and digital assets worth $621,000.2018 has however turned out to be a roller-coaster, raising concerns whether the company will be able to sustain its operations around bitcoin. With cryptocurrencies, showing signs of edging lower, it is becoming increasingly clear that BTSC will struggle to generate significant returns from its bitcoin operations.BCG Merger Stand-Off Another red flag that raises concerns about BTSC long-term prospects is the fact that it is yet to close a proposed merger with Blockchain Global Limited. Mid last year, the company signed a Letter of Intent to acquire the Australian blockchain company which operates four distinct business lines.It now appears the acquisition could take much longer or even fall through, the company has acknowledged it is not sure whether it will close the deal.

“With respect to the merger with the Australian blockchain company, due to delays in receiving their audited financials and other due diligence items, the board unanimously decided to evaluate other potential merger targets,” BTSC in a statement.

News of the proposed acquisition propelled the stock to all-time highs of $0.64 a share as investors took note of the fact that BCG would go a long way in strengthening BTSC revenue stream. BCG came into the deal having generated $AU$5.9 million in FY16 a 300% increase from FY2015The company is reportedly eyeing other strategic options which involve pursuing potential targets that it hopes will drive shareholder value.What Next The acquisition of BCG is the catalysts that investors hoped will propel BTSC higher up the charts. With the negotiations hitting a standstill, it does not come as a surprise that the company’s sentiments in the cryptocurrency space continue to hit rock bottom.BTSC finds itself in a precarious position as investors continue to pull away from the volatile space. That said, the company might have to change its core business and focus more on the underlying blockchain technology, rather than bitcoin, if it is to have any chance of escaping the onslaught in the space.Until the company, finds a way of leveraging the blockchain technology and reduces its dependence on bitcoin, its stock should continue to be under pressure as virtual currencies edge lower.We will be updating our subscribers as soon as we know more. For the latest updates on BTCS, sign up below!Disclosure: We have no position in BTCS and have not been compensated for this article.

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