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BTCS Secures $57.8M Financing for Ethereum Expansion

Coin WorldThursday, May 15, 2025 5:19 am ET

1min read

BTCS, a publicly traded company, has announced a significant financing agreement worth $57.8 million, led by investment firm ATW Partners. This agreement is aimed at purchasing Ether (ETH) as part of the company's expanding blockchain infrastructure strategy. The deal, announced on May 14, will enable BTCS to enhance its validator node operations and generate recurring revenue through ETH staking.

BTCS CEO Charles Allen highlighted that this move aligns with the high-profile Bitcoin (BTC) accumulation strategy of Strategy (formerly MicroStrategy) and leverages Ethereum for long-term growth. Allen stated, "We are executing a disciplined strategy to increase our Ethereum exposure and drive recurring revenue through staking and our block building operations."

As part of the financing agreement, BTCS issued an initial $7.8 million tranche in convertible notes, with the option to draw an additional $50 million in funding subject to mutual agreement. These notes are convertible to BTCS common stock at a fixed price of $5.85 per share, which is almost 200% higher than the company’s stock price of $1.99 on May 13. The notes have a two-year maturity period and carry a 6% annual interest rate, meaning BTCS has two years to repay the loan if it’s not converted into stock, and will pay 6% in interest yearly while the notes are active.

Investors are essentially betting on the future rise of BTCS stock, providing the company with the necessary capital to scale its Ethereum operations. Additionally, investors received an option to buy 1.9 million shares at $2.75 each for the next five years, a price much higher than the current stock price but lower than the conversion rate stated in the agreement.

This financing agreement follows BTCS's recent use of the lending protocol Aave to borrow funds for acquiring ETH, although the exact amount of ETH acquired through this protocol was not disclosed in the announcement. The company's decision to purchase ETH comes after the crypto asset experienced significant gains following the Pectra upgrade. On May 12, Ether’s market cap surged by 42%, surpassing the stock valuations of major corporations and placing Ether as the 39th-largest asset by market cap.

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