BTCS Inc.

BTCS Inc. is a U.S.-based, Nasdaq-listed blockchain technology company that focuses on revenue generation through blockchain infrastructure and decentralized finance (DeFi) activities, primarily on the Ethereum network. The company operates as an active participant in the Ethereum ecosystem, generating digital asset-denominated on-chain revenues through its operations. While BTCS maintains significant Ethereum (ETH) holdings, these serve as operating assets to support revenue generation across its business lines, rather than being held passively.

The company's business model is centered on providing core blockchain infrastructure services, participating in transaction validation and block construction, and engaging in decentralized finance activities. Its revenue generation is a mix of recurring ETH-denominated staking revenue and variable fees from block building and DeFi participation. Primary customer segments are not explicitly defined, but the company's activities support the broader Ethereum ecosystem.

BTCS operates through three primary, complementary business lines: Validator Node Operations ("NodeOps"), Block Building ("Builder+"), and Decentralized Finance Operations ("Imperium"). NodeOps involves operating validator nodes on the Ethereum network, performing validation and consensus-related activities, and earning ETH-denominated staking revenue, including protocol-defined rewards and execution layer transaction fees. Builder+ participates in the blockspace value chain by operating proprietary block builders that construct optimized transaction blocks for submission to Validators, with revenues derived from fees earned when BTCS-constructed blocks are successfully proposed on-chain. Imperium, launched in 2025, focuses on deploying digital assets into decentralized finance protocols as a liquidity provider and market participant, generating variable revenues based on protocol utilization, market conditions, and deployed asset performance.

NodeOps and Builder+ collectively form the company's blockchain infrastructure activities, while Imperium is a distinct DeFi operating segment. In fiscal year 2025, Builder+ operations accounted for approximately 80% of total revenue, NodeOps contributed approximately 12%, and Imperium DeFi revenue represented the remaining 8%.

For the fiscal year ended December 31, 2025, total revenues increased to $16,491,584 ¹ from $4,073,518 ² in 2024, representing a 305% ³ increase. Blockchain infrastructure revenues were $15,177,667 ⁴ in 2025, up from $4,073,518 ⁵ in 2024, an increase of 273% ⁶. DeFi revenues, which commenced in 2025, were $1,313,917 ⁷. Total cost of revenues increased to $14,481,654 ⁸ in 2025 from $3,127,509 ⁹ in 2024, a 363% ¹⁰ increase. Gross profit for 2025 was $2,009,930 ¹¹, an increase of 112% ¹² from $946,009 ¹³ in 2024. The company reported a net loss of $(33,353,433) ¹⁴ in 2025, compared to a net loss of $(1,271,174) ¹⁵ in 2024. Basic and diluted EPS were both $(1.00) ¹⁶ in 2025, compared to $(0.08) ¹⁷ in 2024. Cash and cash equivalents were $1,526,395 ¹⁸ as of December 31, 2025, down from $1,977,778 ¹⁹ in 2024. Total current liabilities were $63,372,848 ²⁰ and non-current liabilities were $11,842,195 ²¹, primarily consisting of convertible notes payable. Total debt obligations as of March 22, 2026, were approximately $61,826,000 ²², comprising $43,965,000 ²³ under its Aave Protocol lending arrangement and $17,861,000 ²⁴ in convertible notes payable.

The year-over-year increase in revenue was primarily driven by the expansion of Builder+ operations and the introduction of Imperium DeFi activities. Cost of revenues increased at a faster rate than revenues, reflecting higher Validator Payments and infrastructure costs associated with expanded block-building activity. Operating expenses increased significantly, primarily due to realized losses on digital asset transactions of $8,184,469 ²⁵ and unrealized losses on digital assets of $15,713,307 ²⁶ in 2025, compared to realized losses of $767,375 ²⁷ and unrealized gains of $(7,683,772) ²⁸ in 2024. Interest expense also increased to $(3,517,671) ²⁹ in 2025 due to decentralized borrowings and convertible notes.

During 2025, BTCS completed a strategic repositioning to concentrate its operations and capital allocation on Ethereum-focused activities. This involved discontinuing validator node operations on non-Ethereum blockchains and liquidating most non-Ethereum digital asset holdings. The company also discontinued the development and operation of legacy technology service platforms, including StakeSeeker in 2024 and ChainQ in 2025, to focus resources on scalable, revenue-generating blockchain infrastructure and DeFi activities. In August 2025, the Board approved a special dividend of $0.05 ³⁰ per share on common stock and Series V Preferred Stock, paid in October 2025 through cash payments of approximately $2,680,000 ³¹ and ETH distributions. A one-time loyalty payment of $0.35 ³² per share, payable solely in ETH, was authorized for eligible common stockholders and settled in February 2026. On September 4, 2025, the Board approved a share repurchase program authorizing the company to repurchase up to $50 million ³³ of its common stock over a three-year period, with $46,000,000 ³⁴ remaining available as of March 22, 2026.

BTCS enters 2026 with a business model focused on expanding high-margin, scalable revenue opportunities. Management believes that the continued expansion of Builder+ operations and increased deployment through Imperium will position the company to participate meaningfully in the ongoing growth of decentralized technologies and create long-term shareholder value.

The company intends to continue expanding its Builder+ operations by increasing private order flow integrations, enhancing block-building efficiency, and deepening relationships with participants across the Ethereum transaction ecosystem. Management believes that block building represents a scalable, technology-driven revenue opportunity and expects Builder+ to remain a significant contributor to revenue growth. Validator node operations are expected to remain a core component of the company's infrastructure strategy, providing recurring ETH-denominated rewards while supporting network security. BTCS will continue to evaluate Validator deployment strategies based on expected revenue, network conditions, and capital requirements.

The company expects Imperium to become an increasingly important component of its operations. BTCS plans to expand asset deployments into DeFi protocols and pursue additional integrations to broaden its on-chain activities. Imperium is intended to support scalable, high-margin, high-growth revenue while reinforcing BTCS’s integrated position within the Ethereum ecosystem. BTCS anticipates that DeFi revenues will contribute a growing percentage of total revenue in 2026 and beyond, subject to market conditions and protocol performance.

Management expects professional fees to decrease in fiscal year 2026, as the fiscal year 2025 fees related to the S-3 filing and ATM program are non-recurring. General and administrative expenses are expected to fluctuate based on operational growth, regulatory filing activity, and the level of block-building and order flow support required as operations continue to scale. Research and development expenses may fluctuate in future periods based on the scope and timing of exploratory initiatives and infrastructure enhancements. Marketing spend is expected to remain at or above current levels as the company continues to pursue strategic growth and community engagement efforts.

The company expects interest expense to rise in future periods as a result of ongoing utilization of DeFi borrowings and the full-term amortization of outstanding convertible notes.

BTCS seeks to expand its operations by accessing capital through a combination of traditional and decentralized financing arrangements. The company anticipates future financing activity may include additional DeFi borrowings and capital raised through the ATM program or other financing instruments, as it continues to scale blockchain infrastructure and DeFi operations, enhance liquidity, and accumulate ETH in support of long-term growth. The Board approved a share repurchase program on September 4, 2025, authorizing the company to repurchase up to $50 million ³⁵ of its common stock over a three-year period, with approximately $46,000,000 ³⁶ remaining available as of March 22, 2026. The company expects any future repurchases to be subject to its liquidity position, prevailing market conditions, and other capital allocation priorities.

The company's long-term objectives include expanding its participation across Ethereum-related infrastructure activities, growing recurring on-chain revenues, improving operating leverage, and enhancing shareholder value.

The company operates in blockchain infrastructure and decentralized finance markets characterized by rapid technological change, evolving market structures, and significant market volatility. Its operating results, liquidity, and financial condition are materially impacted by the price volatility of Ethereum (ETH) and other digital assets. Operations are highly dependent on the continued adoption, functionality, and economics of the Ethereum network and related protocols, and changes to protocol rules, market structure, or participant behavior could materially adversely affect the company. Block-building operations depend on highly competitive transaction execution markets, including proposer-builder separation (PBS) and MEV relay ecosystems, and disruptions in these markets could materially adversely affect results. DeFi activities, including ETH-backed borrowing, expose the company to smart contract risks, protocol governance risks, liquidity risks, and potential liquidation events that could result in significant losses. The company relies on third-party infrastructure providers and decentralized protocols, and disruptions or regulatory actions affecting these third parties could materially adversely affect the business. Access to banking services and financial infrastructure is critical, and disruptions to these relationships could materially adversely affect the business. The regulatory landscape for digital assets, blockchain infrastructure, and DeFi is rapidly evolving, and regulatory developments or enforcement actions could materially adversely affect the business, including potential reclassification of digital assets as securities or the company as an investment company. The company is subject to cybersecurity incidents, digital asset theft, and loss of private keys, and does not maintain insurance covering losses of digital assets. The company's limited workforce and dependence on key personnel present operational risks, and the loss of executive officers or other highly skilled employees could materially harm the business. The stock price has been and may continue to be volatile, and investors may experience substantial losses. ETH-backed DeFi borrowings subject the company to liquidation risk if the value of ETH declines, which could require posting additional collateral or repaying borrowings to maintain required collateralization levels, and a default or liquidation event could constitute an "Event of Default" under the Senior Convertible Notes.

Management's message to shareholders emphasizes a strategic repositioning towards Ethereum-native operations, designed to generate recurring on-chain revenues, improve capital efficiency, and actively deploy digital assets in support of long-term growth. The company is focused on expanding high-margin scalable revenue opportunities, with a belief that continued expansion of Builder+ operations and increased deployment through Imperium will position it to participate meaningfully in the ongoing growth of decentralized technologies and create long-term shareholder value. Management actively evaluates capital allocation across validator operations, block-building support, and DeFi deployments based on expected returns, risk profiles, and market conditions. The company anticipates continued growth across Builder+, NodeOps, and Imperium, although the fair value of rewards may fluctuate due to the inherent volatility of digital asset markets. Management expects professional fees to decrease in fiscal year 2026 due to non-recurring S-3 filing and ATM program fees from 2025, while marketing spend is expected to remain at or above current levels. Interest expense is projected to rise in future periods due to ongoing DeFi borrowings and the full-term amortization of outstanding convertible notes.