The BTCS listed on the American Nasdaq will buy $ 57.8 million. On May 14, the company announced a financial agreement with ATW Partners, who participate as the main investor. The purpose of purchases is to increase the turnover from Ethereum strike.
In the footsteps of Strategy
With this investment, according to CEO Charles Allen, BTCS all wants to follow in the footsteps of Strategy, the company that since August 2020 bought more than 550,000 Bitcoin. With the big difference that it uses Ethereum, instead of Bitcoin.
“We carry out a disciplined strategy to increase our exposure to Ethereum, and to increase the turnover out of a strike,” says Allen.
However, the idea is to start small. The first step is to issue $ 7.8 million in convertible bonds, with the option to spend another $ 50 million in similar bonds.
These bonds can be converted into ordinary shares of BTCS, at a fixed price of $ 5.85 per share. That is almost 200% more than the share price of $ 1.99 of 13 May.
The bonds have a duration of two years and an interest rate of 6% on an annual basis. This means that BTCS has to repay the loan within two years if they are not converted into the bonds into shares. And while the bonds are active, the company continues to pay 6% interest.
The big gamble on Ethereum
The strategy of BTCS is special, especially because they choose Ethereum. With that they take a different path than practically all other companies that opt for a “crypto standard” if you can call it that at all.
In fact, every company opts for Bitcoin, and we can clearly see that in the course of the number one in the market, which stays far ahead of Ethereum during this market cycle in terms of performance.
The advantage of the choice of a less followed path is of course that the potential returns are higher. But the disadvantage is that the risks are also a lot greater.
Source: https://newsbit.nl/nasdaq-bedrijf-koopt-voor-578-miljoen-aan-ethereum/
