- BTCS Inc. plans to secure $57.8 million for expanding Ethereum purchases and validator operations.
- By the conclusion of 2024, the company held more than 9,000 ETH and managed over 500 validators.
With Ethereum’s [ETH] rising momentum, BTCS Inc., a firm focused on blockchain technology, is stepping into the fray.
The company has announced its intention to raise $57.8 million to further its goals regarding ETH.
Strategic Investment in Ethereum
The capital acquisition will be executed via debt instruments, specifically through a convertible note, mirroring the approach taken by Michael Saylor with Strategy (formerly MicroStrategy).
In a recent statement, BTCS CEO Charles Allen emphasized that the primary aim of this funding is to:
“This capital infusion is anticipated to allow us to scale our validator node operations by enhancing our ETH holdings at what we consider a pivotal moment in Ethereum’s development.”
The firm expressed that augmenting its ETH holdings would facilitate the deployment of additional validators on the Ethereum network, thus increasing its capacity for staking rewards.
Institutions typically utilize two significant strategies to capitalize on their ETH holdings. One approach involves staking, where ETH is locked away in exchange for rewards.
Currently, stakers can expect a yield of 3%-3.5% annually on their staked ETH.
Source: Staking Rewards
This method provides an additional revenue stream beyond merely holding ETH for an extended period.
Another common institutional strategy involves an ETH basis trade, which consists of purchasing spot ETH—often through a spot ETF—and shorting CME ETH Futures to take advantage of the price discrepancy.
Throughout late 2024’s market rally, the annualized ETH basis surged by 21%. For those employing both strategies, this indicated a potential yield of 24% on their ETH assets.
Source: Velo
After experiencing a 5% decline in Q1 2025, ETH basis trading bounced back in Q2, nearing 9%. When combining this with staking rewards, potential overall profits could reach approximately 12%.
BTCS Inc. is primarily concentrating on the first strategy. As of December 31, 2024, the company held 9,060 ETH and managed 522 validators. Utilizing additional ETH for validator operations may enhance its staking reward generation capabilities.
Consequently, BTCS shareholders have benefited from ETH’s substantial growth, with a remarkable 50% increase over two weeks in May, leading to a 100% surge in BTCS shares, from $1.8 to $3.1.
Although BTCS stock retracted some gains, it still registered a 40% growth on a monthly basis, while ETH returns reached 56%.
Source: Google Finance
