Nasdaq-listed blockchain infrastructure firm BTCS has announced a $57.8 million financing agreement aimed at bolstering its Ethereum holdings and expanding its validator node operations. The deal, led by investment firm ATW Partners, underscores BTCS’s strategic shift toward generating recurring revenue through Ether (ETH) staking.
“We are executing a disciplined strategy to increase our Ethereum exposure and drive recurring revenue through staking and our block building operations,” said BTCS CEO Charles Allen. He noted that the company’s approach mirrors that of Strategy’s (formerly MicroStrategy) Bitcoin accumulation strategy, but with a focus on Ethereum for long-term growth.
As part of the financing arrangement, BTCS has issued an initial $7.8 million tranche in convertible notes, with the option to access an additional $50 million pending mutual agreement. These notes are convertible to BTCS common stock at a fixed price of $5.85 per share, significantly higher than the company’s stock price of $1.99 on May 13. The notes carry a two-year maturity and a 6% annual interest rate.
Investors involved in the deal also received options to purchase 1.9 million shares at $2.75 each over the next five years. This financing follows BTCS’s recent utilization of the Aave lending protocol to acquire ETH, although the company has not disclosed the amount obtained through this method.
The announcement comes on the heels of Ethereum’s significant market performance, with its market capitalization surging by 42% following the Pectra upgrade. As of May 12, Ether’s market cap surpassed those of major corporations like Coca-Cola and Alibaba, positioning it as the 39th-largest asset by market capitalization.
BTCS’s strategic move reflects growing institutional interest in Ethereum’s staking capabilities and its potential for generating steady revenue streams.
