FIRST BITCOIN CAP COM NPV (OTCMKTS:BITCF) Is A Promising Bitcoin Play: Here's Why

FIRST BITCOIN CAP COM NPV (OTCMKTS:BITCF) is up 14% midday on Tuesday and looks set to gain further strength as the day matures. Year to date the company is up more than 1,000%. Much of the recent run derives from the parallel appreciation in the value of bitcoin. The digital currency trades for more than $2,300 a piece right now, up from January lows in and around $750.Fundamental developments in the bitcoin space (Japanese commercial adoption, the delayed potential for a hard fork, framework strengthening initiatives, and more) are behind the run in its flagship currency.When it comes to publicly traded entities like First Bitcoin, some of the value appreciation seems like a valid extension of the bitcoin price action. Bitcoin's continual increase in value strengthens the sector as a whole, making companies like this more valuable on the thesis that they are operating in a more mature industry. Not all of the appreciation can be credited to the underlying run, however. Some companies, as we've covered recently, are running up despite no fundamental or operational advances.The question for anyone thinking about a position in First Bitcoin, then, or for a current shareholder, is are there some operational steps forward that warrant the appreciation we've seen outside of that justifiable by a bitcoin run?In short, yes.We’ve seen two announcements from the company over the past few weeks. One is, for us, not something we can assign any value to. The other is.So the non-value add announcement came on the back of First Bitcoin writing a letter to the SEC to support the agency's consideration of a pending request to create a publicly traded Exchange Traded Fund (ETF) for bitcoin. This is something that's drawn quite a lot of media attention of late, and a regulatory thumbs up would be a great thing for bitcoin, but right now, it's looking unlikely. Readers can check out First Bitcoin's take on the situation here. Our interpretation is that while the company's intentions are sound, the letter is a bit of a miss. It's a bit rambling and fails to get the point across.Luckily for shareholders, however, the company isn’t in the business of writing coherent letters. It's in the business of technical, and specifically, blockchain based, innovation, and to that aim, things look pretty strong.The second of the two above mentioned announcements details the initiation of a new operational effort by the company to set up a blockchain based air miles system. $48 billion worth of points and airline miles are unredeemed in the US right now, and the idea is to allow users the ability to conduct two-way exchange of their miles in order to fix the issue of non-redeemed miles. Basically, users can get air miles from their travel and spending but can – and here's the innovation – exchange them for crypto (and by proxy, fiat) if they are unused. In other words, the company is trying to turn what is now a one-way issue system to a multi-channel exchange system.We think there's run room on this idea alone. Management has shown it's willing and able to move incredibly fast as far as getting these sorts of programs off the ground is concerned, and there's obviously someone with a strong technical knowledge of the space on the company's team that's able to run with the sorts of concepts that are going to drive value both near and long term.The risk with this one is two fold. First, that bitcoin isn’t going to continue to appreciate indefinitely, and when it eventually corrects, we'll likely see short-term collateral correction of its industry constituent entities – of which First Bitcoin is one.Second, that growth is going to need funding and that this funding is going to derive from dilutive issue.That said, there's plenty of room for appreciation beyond the impact of these two risks and as an exposure to the bitcoin space outside of the digital currency itself, this one's well worth a look.We will be updating our subscribers as soon as we know more. For the latest updates on BITCF, sign up below!Disclosure: We have no position in BITCF and have not been compensated for this article.