Company Overview

BTCS Inc. is a Nasdaq-listed U.S.-based blockchain technology company focused on blockchain infrastructure, with its primary operations currently centered on the Ethereum network. The company’s core focus is on driving scalable growth through a diverse range of blockchain-focused technological solutions, emphasizing Ethereum infrastructure, including block-building and validator node operations.

Blockchain Infrastructure

BTCS’s blockchain infrastructure centers on supporting the validation of transactions and securing proof-of-stake (“PoS”) and delegated proof-of-stake (“dPoS”) blockchain networks. The company manages a network of cloud-based validator nodes that perform essential network functions, including transaction validation (“attestation”) activities and proposing new blocks. Through these activities, BTCS earns native token rewards by staking its own crypto assets on validator nodes operated by BTCS and third parties.

Block Building – Builder+

A central focus of BTCS’s current operations is its Ethereum block-building initiatives under Builder+, which commenced operations in 2024. Through Builder+, the company purchases block space and leverages advanced algorithmic processes to construct blocks for on-chain validation. The goal of Builder+ is to maximize revenue by optimizing the contents and structure of each block.

Staking-as-a-Service – NodeOps

BTCS operates a non-custodial Staking-as-a-Service (“StaaS”) business model that enables crypto asset holders to participate in network consensus mechanisms by staking and delegating to BTCS-operated validator nodes. As a non-custodial validator operator, the company receives a percentage of a crypto asset holders’ staking rewards generated as a validator node fee.

Supporting Platforms: ChainQ

To complement its core blockchain infrastructure, BTCS has developed “ChainQ,” an AI-powered blockchain data and analytics platform designed to increase accessibility and transparency within the blockchain ecosystem.

Strategic Outlook

Looking forward, BTCS remains committed to enhancing its blockchain infrastructure capabilities, with a strong emphasis on its Ethereum block-building operations. The company is poised to leverage its expertise in validator node management and block-building optimization as it seeks scalable opportunities within the rapidly evolving blockchain ecosystem.

Crypto Assets

The tables below detail BTCS’s quarterly crypto asset holdings and fair market value for each quarter from Q1 2024 through Q1 2025. The company’s total crypto asset holdings decreased from $38.7 million in Q1 2024 to $20.1 million in Q1 2025, a 48% year-over-year decline, primarily due to the drop in the prices of major cryptocurrencies like Ethereum, Cosmos, and Solana.

Table: Crypto Assets Held at the End of the Following Calendar Quarters

Table: Fair Market Value of Crypto Assets at the End of the Following Calendar Quarters

Crypto Asset Rewards

The tables below detail BTCS’s quarterly crypto assets earned during each of the quarters from Q1 2024 to Q1 2025 through its blockchain infrastructure staking activities (NodeOps) and block-building activities (Builder+).

Table: Crypto assets earned from blockchain infrastructure staking activities through NodeOps

Table: Crypto assets earned from block-building through Builder+

Table: Fair Market Value of Crypto Asset Rewards Earned Recognized as Revenue

Results of Operations for the Three Months Ended March 31, 2025 and 2024

Revenues: Revenue for the 2025 Quarter increased to approximately $1,689,000 compared to approximately $451,000 in the 2024 Quarter. The increase was primarily attributable to the expansion of BTCS’s Builder+ operations, which focus on Ethereum block-building activities.

Cost of Revenues: Cost of revenues increased during the 2025 Quarter, primarily due to higher Validator Payments made to external parties to secure block space for purchasing block space as part of the company’s block-building activities under Builder+.

Operating Expenses: General and administrative expenses, research and development expenses, compensation and related expenses, and marketing expenses all increased during the 2025 Quarter compared to the 2024 Quarter, reflecting the company’s ongoing investment in operational infrastructure to support Builder+ activities and broader public company compliance efforts.

Net Income (Loss): The decline in net income for the 2025 Quarter compared to the 2024 Quarter was primarily driven by a sharp reversal in the fair value of crypto assets, resulting in significant unrealized losses during the period. Operating expenses also increased meaningfully, led by higher compensation costs and a rise in marketing spend to support strategic growth initiatives.

Liquidity and Capital Resources

As of March 31, 2025, the company had approximately $270,000 of cash and working capital of approximately $20,202,000. As of May 13, 2025, the company had approximately $7,747,000 of cash and cash equivalents, and the fair market value of the company’s crypto assets was approximately $30,741,000.

The company believes that its existing cash and crypto assets, together with the proceeds from the May 13 financing and the ability to raise additional funds through its ATM Agreement, provide sufficient liquidity to meet working capital requirements, anticipated capital expenditures, strategic funding needs, and contractual obligations for at least the next twelve months from the filing date of this report.

Cautionary Note Regarding Forward-Looking Statements

This report contains forward-looking statements, including statements regarding the company’s liquidity, belief that its blockchain infrastructure efforts will form the core growth for its business, plans to expand its PoS operations, potential growth opportunities, views regarding blockchain technology, and anticipated increases in revenues and gross margins. These forward-looking statements are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict, and the company’s actual results may differ materially from those contemplated by the forward-looking statements.