BITCOIN SERVICES I (OTCMKTS:BTSC) Runs Out Of Steam As Bitcoin Plunge Continues

The last time we covered BITCOIN SERVICES I (OTCMKTS:BTSC), it was one roll as it continued to touch higher highs, in line with the hype around cryptocurrencies. As bitcoin reached record highs of $20,000, so did the bitcoin stock.Fast forward, the momentum has cooled off, and it appears Bitcoin Services is paying the price for running too fast. Over the past one month, the stock has shed more than 50% in the market after an impressive run that took it to highs of $0.64 a share.A steep decline in share price is a point of concern, given that it is showing no signs of slowing down. A closer look at the chart below shows that the stock has been trading in a downtrend over the past one month.Bitcoin Services faces immediate support at the $0.15 mark, below which it could drop to the $0.12 handle, last seen in November. On the upside, the stock faces immediate resistance at the $0.24 handle, above which it could make a push for the $0.28 mark ahead of $0.32.Before we look at the possible causes of the recent price swings, let us look at what Bitcoin Services does, in its pursuit of shareholder value.Bitcoin Services Business OverviewBitcoin Services is a digital service company focused on the mining of Bitcoin and other valuable cryptocurrencies. It also offers bitcoin escrow service which acts as a neutral third party in between buyers and sellers online. The company is also involved in blockchain software development.In 2016, Bitcoin services unveiled an online marketplace where goods and service can be bought using bitcoin. Some of the products on offer include Cars, apparel, electronics and real estateSell-off TriggerBitcoin services rose to prominence mid last year, as investors looked for ways to gain exposure in the booming cryptocurrency space.“The thing is, none of this matters right now. The bitcoin space is on fire and traders are looking to pick up exposure to the dramatic rise in the price we’ve seen over the last few months. Bitcoin as a currency is in and around the $2,600, mark right now and looks set to continue appreciating further. These people are looking for an exposure and Bitcoin Services is offering them that exposure. Sure, it’s indirect, and sure, it’s not a long-term investment thesis, but so long as bitcoin is running, Bitcoin Services is going to do the same.” sourceThe hype has slowly cooled off, and as it stands, Bitcoin Services is under pressure more than ever.Bitcoin Services sell-off, which has come in huge volume, has mostly been triggered by the uncertainty that appears to have hit the cryptocurrency space. Since the start of the year, Bitcoin and other cryptocurrency have come under immense selling pressure, amidst ongoing concerns about potential crackdowns in China and South Korea.China and South Korea account for a considerable volume of bitcoin mining and trading activities. Uncertainties in the two markets goes a long way in triggering a sell-off of companies with stakes in the space. As Bitcoin has retreated from all-time highs, so has Bitcoin Services.It goes without saying that Bitcoin Services valuation is mostly tied to the performance of bitcoin. A rally in the price of bitcoin will always be good for the stock given that it goes a long way in making the mining business highly lucrative.On the other hand, any downturn goes a long way in fuelling fear among investors, triggering a sell-off spree of stocks with ties to the cryptocurrency.Bitcoin Services is yet to issue any substantial news on what it is doing to grow its business around bitcoin and other cryptocurrencies. The last piece of information came in May of last year as the company announced it was in the process of beginning Monero mining.Later on, the company announced plans to begin the development of a new cryptocurrency wallet that would let users safely store, multiple digital currencies in one wallet.The company has gone several months without significant updates a misstep that could explain why it has come under pressure in recent weeks. A lack of press releases and investor information on its website is making it hard for investors to justify its hefty valuation on Wall Street.Bottom LineBitcoin Services ascent when bitcoin boom was in full force is slowly coming to an end. With the cryptocurrencies showing signs of trading lower each day, the stock could continue to come under immense selling pressure.The major undoing to BITCOIN SERVICES I (OTCMKTS:BTSC) is the fact that it is yet to provide substantial information on what it is doing in its bid to generate value from blockchain technology. Until the company can give clear updates, it will continue to be under pressure.We'd also like to remind our readers, that the SEC has been stepping in and suspending trading in several bitcoin-related stocks. We urge caution in BTSC and see better bets out there for investors.We will be updating our subscribers as soon as we know more. For the latest updates on bitcoin stocks, sign up below!Disclosure: We have no position in BTSC and have not been compensated for this article.Image courtesy of Zach Copley via Flickr