BITCOIN SERVICES I COM USD0.001 (OTCMKTS:BTSC) is attracting a lot of speculative volume right now. The company is up 66% this week, with just shy of 40% during the Thursday session. Year to date, the number rises to 245%. It’s still very much a microcap player, however, languishing in and around the mid double zeros. At last close, the company went for a little over $0.005. We all know bitcoin is a pretty hot topic right now, however, and this is driving the attention that is boosting this stock. If the attention continues, and the stock continues to run, that it is a double zero play won’t matter to the short-termers.
So, what’s next for this one?
For those not familiar with the company (and chances are that’s a fair number of readers), Bitcoin Services is a year-or-so old company that is attempting to position itself as a publicly traded player in the bitcoin space. For us, this is key to this company’s chances of picking up strength near term. The bitcoin space isn’t easy to pick up an exposure to right now. Sure, traders can buy bitcoins, and it’s actually become relatively simple to do just that by way of various exchanges popping up across the globe. Many don’t want to buy direct, however, for whatever reason, and so this makes the equities markets a popular destination for a sort of secondary, indirect exposure. It’s thin pickings, right now, however. There are a couple of bitcoin based funds, and companies like MGT Capital Investments Inc. (OTCMKTS:MGTI) offer an exposure, but outside of that, traders are left with a handful of options – one of which is this one.
Bitcoin Services basically has three arms to its business right now.
The first is a bitcoin mining program, but it’s not huge. If you’re looking for mining exposure, MGT is probably a better pick. BTSC just released a PR announcing the acquisition of four Antminer S9s. The release sounds like it’s claiming this acquisition has brought a wealth of processing power to the company, but these are just four single miners, with a total cost of around $8K. They are individual type bits of tech, not commercial scale stuff. Not to say it’s not noteworthy, but it’s not an investment thesis.
The second is an escrow service, and we think there’s probably some run room in this arm. There are a few of these types of services out there already, but when it comes to escrow, trust is key, and the publicly traded nature of Bitcoin Services could serve as a kicker to an individual’s decision as to which escrow provider to go with when transferring large BTC amounts.
The third is blockchain software development. In all honesty, this is too vague for us to assign any worth to it right now. Whatever happens with bitcoin, blockchain is here to stay, and it’s the side of the technology that big industry is going to (and in many cases, already is doing) adopt. If Bitcoin Services can put something together that makes use of the blockchain, then there’s value in it, but until we know what it’s trying to do, it’s impossible to say how much.
Anyway, none of that matters right now.
Why? Because traders aren’t buying this one because of its long term potential. They are buying it to take advantage of the exposure it offers to the bitcoin space, the bellwether for which (naturally) is the price of bitcoin. This week, BTCUSD broke through the 1,000 mark once again, and currently sits in and around $1,050. That’s a little off the early 2017 highs of $1,300, but the upside trend is there, and it looks set to maintain course as we move into the second quarter.
As bitcoin rises, so will this stock.
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Disclosure: We have no position in BTSC and have not been compensated for this article.