Organized & compiled by: Deep Tide TechFlow.
Guest: Carles Allen, CEO and Chairman of BTCS.
Host: Paul Barron.
Podcast source: Paul Barron Network.
Original title: $100 million Ethereum Mega-Strategy! 🔥 $BTCS CEO Charles Allen INTERVIEW.
Broadcast date: July 8, 2025.
Key takeaways.
Companies with strategic Ethereum reserves have now become darlings in the U.S. stock market, with related stock prices experiencing varying degrees of increase.
The key drivers and leaders behind the company play a huge role in this crypto asset reserve boom.
(Related reading: ETH reserve companies become new favorites in the U.S. stock market, reviewing the businesses and backers of four star enterprises.)
Recently, BTCS Inc. announced its strategic plan to raise $100 million in 2025 to purchase Ethereum and support the expansion of its ETH-centric infrastructure model.
In this episode, BTCS CEO Charles Allen discusses how the company's strategy is creating long-term value by increasing per-share ETH holdings, driving revenue growth, and minimizing dilution of shareholder equity.
Highlights summary.
Ethereum has the greatest potential for upside because it has not yet experienced explosive growth like Bitcoin but has many applications and projects building on it.
Ethereum is expected to become the core financial infrastructure supporting the operation of the digital economy.
Ethereum is a light-asset model where your assets are productive rather than non-productive. They do not depreciate; they appreciate.
There may be about $2 billion to $10 billion in capital flowing into digital asset-related financial strategies and public offices. As more and more institutions and investors join, they often become 'following' players.
The blocks we have built in the Ethereum network account for 2.7% of the total blocks. In other words, 2.7% of all transactions on the Ethereum network are processed by our block builders.
Executives at Sharplink and Bitmine usually serve as chairpersons of the company but do not directly oversee daily operations. In contrast, our team is deeply involved in the technical level, operating our own nodes and responsible for block building.
We are currently among the top five block builders globally, which sets us apart in the industry.
We recently announced plans to raise $100 million to purchase additional Ethereum and run validating nodes through the Rocket Pool platform; we choose to personally handle the entire staking process. As we raise more funds, we have the ability to truly enhance revenue and the number of Ethereum per share.
If a company wants to acquire us, such as Tom Lee's company, which is valued at 8 to 10 times NAV, then we would seriously consider such an opportunity.
Unless you personally operate validating nodes and participate in the consensus mechanism, you are merely handing over control to others, and those who control staking truly hold the power.
If someone says, 'I want to transform a NASDAQ company worth less than $10 million into a project worth $250 million and hope to complete it within a month.' This sounds simple; you just need to find an excellent management team, a reliable wallet service provider, and a stable infrastructure provider to initiate operations.
Extreme supporters of Bitcoin may never choose to join the Ethereum ecosystem.
Ethereum reserve strategy.
Paul:
In this episode, we invite Charles Allen, CEO of BTCS Inc. It has been a while since our last in-depth discussion. During this time, many changes have occurred in your company. Can you introduce us to the overall development of BTCS Inc.? In particular, how does it compare to other digital asset companies, such as Ethereum-related enterprises? Currently, Bitcoin's market capitalization is about $46 billion. What are your strategies and current status?
Charles:
Our Ethereum reserve strategy is actually part of the company's operations. Recently, we adjusted the way we promote this strategy in the market because it is indeed a market hotspot. I believe we are currently the only publicly traded company focused on Ethereum and genuinely committed to the development and operation of Ethereum infrastructure. We achieve this by operating independent validating nodes, providing node support for Rocket Pool, and participating in block building, integrating these functions vertically. These measures are the core drivers of our revenue growth.
Bitcoin vs ETH business model.
Paul:
When comparing the current situation to the past phase where more attention was focused on Bitcoin, I noticed the differences between your Ethereum and Bitcoin business models. One significant factor is the difference in asset structures, especially in how Bitcoin is held versus how assets operate within the Ethereum ecosystem. Does your business model shift mean Bitcoin's market value has been undervalued?
Charles:
I indeed believe so. We shifted our business model from Bitcoin to Ethereum in 2021, becoming the first publicly traded company focused on Ethereum. At that time, I believe not many people truly understood what we were doing. Now, with the involvement of Tom Lee and Joe Lubin, Wall Street has recognized Ethereum's value in the public market more.
We were the world's first publicly traded Bitcoin miner, but ultimately chose to abandon that capital-intensive model. Ethereum is a light-asset model where your assets are productive rather than non-productive. They do not depreciate; they appreciate.
Tom Lee talks about Circle IPO.
Paul:
This is the core difference between Bitcoin financial companies and Ethereum financial companies. To better understand this, I would like to play a short video of Tom Lee, in which he shares his views on future strategy. Please take a look.
Tom Lee (video segment original voice translation):
Have you participated in Circle's IPO or hold its stock? Circle went public ten days ago at a price of $31 per share, and the stock price has now risen to $242. Its stock code is CRCL. Circle's success is closely related to the Ethereum ecosystem, as its operations rely on the Ethereum network, and the issuance of stablecoins primarily operates on Ethereum. Therefore, I believe Ethereum's value will see a significant rebound.
In the next five years, Circle could become one of the most promising investment targets. Its price-to-earnings ratio is as high as 100 times that of many traditional funds, which has provided investors with substantial returns this year, even allowing many to join the global top 1% of wealth. Circle's stock is seen as a god-tier investment target, and the market for stablecoins is also growing rapidly. Currently, the total market capitalization of stablecoins is about $250 billion, accounting for approximately 30% of Ethereum network gas fees. If the scale of stablecoin creation grows tenfold, it will lead to an exponential increase in Ethereum's gas fees. This further solidifies Ethereum's position as the direct beneficiary of Wall Street's attempts to equity-ize cryptocurrencies.
Charles:
They are using Ethereum's L2 solutions to realize the tokenization of equity.
BTCS name change and record revenue.
Paul:
In analyzing your business model and operations, I noticed you have multiple revenue centers. I also saw a tweet from you detailing how these centers are built. On your website, this content is clearly categorized, such as builders, node operations, and chains. Since your business has fully shifted to the Ethereum ecosystem, why not directly change the company name to make it clearer to the public that this is an Ethereum-related business rather than Bitcoin?
Charles:
This question is very interesting. In fact, BTCS stands for Blockchain Technology Consensus Solutions, which is indeed very fitting. We focus on the consensus mechanism of blockchain technology, providing consensus services, running infrastructure, and responsible for block building, so this name is very reasonable.
We have indeed considered changing the company name, but it requires a lot of effort and resources. Although many people suggest we include 'Ethereum' in the name, we have chosen to maintain the status quo for now. Additionally, we are also engaged in block building on the Financial Chain, which is a fork of Ethereum. Block building has become our main source of revenue, accounting for 80% of first-quarter revenue. We expect second-quarter revenue to set a new record, exceeding the $2.3 million in the fourth quarter of last year.
To help everyone understand better, the blocks we have built in the Ethereum network account for 2.7% of the total blocks. In other words, 2.7% of all transactions on the Ethereum network are processed by our block builders. If our validating nodes can continue to provide consensus and the block builders can operate stably, our business scale will further expand.
We view block builders as a standardized technical module, similar to devices capable of running at 120 volts. If we add adapters, we can connect to other more scalable chains. In fact, we have successfully achieved this technical application for Binance. One can imagine this as upgrading the device to a version capable of running at 240 volts. This is also why we insist on using the name 'blockchain technology consensus solutions' rather than directly naming it as an Ethereum-related brand.
Nevertheless, Ethereum remains our core financial asset. Our goal is to continuously increase the number of Ethereum per share while driving consistent revenue growth. We aim to achieve this through stock price appreciation, strategic capital raising, and combining DeFi with traditional financial metrics.
Sharplink vs BTCS and Aave lending.
Paul:
Companies like Sharplink and Bitmine seem to adopt strategies that are completely different from yours. Could you elaborate on the main differences between you?
Charles:
We are indeed very different from these companies. First of all, executives at Sharplink and Bitmine usually serve as chairpersons of the company but do not directly oversee day-to-day operations. For example, I serve as a board member at another company, attending only four meetings a year, so their actual involvement in company operations is limited. In contrast, our team is deeply involved at the technical level, operating our own nodes and responsible for block building. We are currently among the top five block builders globally, which sets us apart in the industry.
Additionally, our capital markets strategy is also vastly different from these companies. Before entering the crypto space, I had ten years of investment banking experience and successfully took a company public in 2014. Today, we are the only publicly traded company that utilizes DeFi (decentralized finance) as a source of funding. We lend through the Aave platform, currently approaching a lending ratio of about 40%. This year we plan to raise $100 million, expecting the lending ratio to remain around 40%, with funding sourced through issuing convertible bonds. Convertible bonds are a debt instrument that can be converted into company stock in the future.
Recently, we also reached an agreement with ATW Partners LLC to successfully borrow about $7.8 million and actively participated in this financing activity. By combining these funds with lending on the Aave platform and ATM (automated vending machine) sales, we are able to optimize operational efficiency while keeping equity dilution to a minimum, thus enhancing the company's balance sheet. This strategy is particularly advantageous in comparison to competitors.
Buying another $100 million in ETH!
Paul:
I noticed your performance in strategic ETH reserves. On this list, the Ethereum Foundation and Sharplink are at the top, while BTCS is also gradually moving up and seems set to surpass Arbitrum DAO. Based on previous discussions, do you have plans to further purchase Ethereum to enhance your ranking on this list?
Charles:
As I mentioned earlier, we recently announced a plan to raise $100 million to purchase additional Ethereum, which will support our staking operations. We plan to run validating nodes through the Rocket Pool platform while vertically integrating with our block-building business. Unlike other companies that hand over Ethereum to third-party custodians for staking and pay fees, we choose to personally handle the entire staking process. I believe that as we raise more funds, we have the ability to truly enhance revenue and the number of Ethereum per share.
Tom Lee: Is the ETH company merger coming?
Tom Lee:
The third strategy you currently adopt is to leverage the relationship between market prices and net asset value (NAV), as well as the advantages of company equity. In addition, there are some financial companies whose trading prices are far above net asset value (SLA). For example, if a company's stock price is three times its net asset value, then you might consider acquiring those financial companies. Through such consolidation, we can create a business specifically supporting the DeFi ecosystem, such as providing Ethereum staking services. Ethereum staking is a huge advantage because it allows users to earn rewards by validating transactions, a mechanism that cannot be realized in the Bitcoin network. This method not only expands the scale of business but also further consolidates Ethereum's core position in the DeFi ecosystem.
BTCS and Tom Lee merger?
Paul:
Tom Lee mentioned potential mergers with other stakeholders. I am curious about your views, as I see that the technology and tools you possess could help companies like Sharplink tackle current challenges. So, have you considered the possibility of a merger?
Charles:
I think a merger is a possibility, but it depends on the valuation. If a company wants to acquire us and our valuation is close to net asset value (NAV), we would seek a higher premium. If Tom Lee's company, which is valued at 8 to 10 times NAV, then we would seriously consider such an opportunity.
Over time, NAV may decline and gradually shift towards a valuation method similar to that of ETFs, as ETFs typically trade at NAV. However, if a company holds financial assets on its balance sheet, we can trade at a premium.
There are several reasons behind this. First, we can leverage some leverage mechanisms that ETFs cannot achieve. For example, we have been lending on the Aave platform and plan to expand this further. Additionally, we can raise funds by issuing convertible bonds while enhancing the company's financial flexibility. These methods can increase the company's value, thus justifying premium trading.
For us, financing strategy and operational efficiency are key. This is also where we differentiate ourselves from other Ethereum finance companies. Many companies simply place assets on their balance sheets, while we focus on operating validating nodes. Since 2021, we have been deeply involved in the Ethereum space, and we started engaging in the crypto industry back in 2014. Therefore, our goal is to build the financial infrastructure and framework needed for the future Ethereum ecosystem, providing solid support for industry development.
Bitcoin transfer to Ethereum.
Paul:
The key question is, how much Bitcoin will be transferred from the Bitcoin network to Ethereum? If we observe those companies investing in digital assets, especially those adopting new financial models, how much Bitcoin might flow into Ethereum? How large do you think the market size will be?
Charles:
Based on my judgment, there may be about $2 billion to $10 billion in capital flowing into digital asset-related financial strategies and public offices. As more and more institutions and investors join, they often become 'following' players. For Bitcoin, you can see that Michael Saylor's strategy has performed very prominently, along with the active participation of MetaPlanet and David Bailey. However, in the public markets, such trades typically follow a fixed successful model. Usually, a high-profile individual will serve as the chairman of the new company's board, and this company usually has a market value of less than $10 million, and its business model may already be struggling. Then, through a series of operations, the company's market value can grow rapidly, and when these companies submit resale registration statements, many investors choose to exit the market, essentially opening up the pathway for stock resales.
Currently, these companies typically trade at prices close to net asset value (NAV) and are starting to rebound. But I believe that trading at a premium far above NAV is usually just a form of short-term speculation, rather than a sustainable long-term business model. Overall, if luck is on their side, such companies might reach double the valuation of MicroStrategy, but if luck is not on their side, it might only be three times. However, trading at 10 times NAV, I think this is a very difficult proposition, as smart hedge funds will get involved, and they may short your stock or engage in arbitrage by buying other stocks with different NAV premiums.
So overall, if the market is rational, although the market is not always rational, digital asset-related financial companies should trade at some form of premium, typically based on the company's operational capabilities and actual performance. However, if the valuation differences between different companies are too large, the market will eventually notice this and push the valuations of these companies back to a more reasonable level.
Schwab is excited about tokenized stocks.
Paul:
This is a video from the Schwab network discussing how tokenization may impact Ethereum, and it could even have a greater impact on Bitcoin. Let's take a look together.
Video content:
"They plan to tokenize private securities, specifically companies like SpaceX. They are also looking for more targets, including some AI companies which currently only qualified investors can invest in, while ordinary investors cannot access these opportunities for the time being."
"I can imagine seeing more similar announcements in the future. Will this have an impact on the demand for Bitcoin? That is the question I want to raise. Will we see some of the demand originally directed towards Bitcoin shift to these tokenized products?"
"Now we have witnessed the rise of many different investment methods. In the past, Bitcoin and its related assets were almost the only digital investment options, but that has changed. I think the latest trend of tokenization is a very noteworthy field, with many exciting discussions happening every week."
The Ethereum boom is coming.
Paul:
Bitcoin may face some impact. And Schwab is keeping an eye on the upcoming Ethereum boom. Do you think this boom will really come? What kind of impact will it have on you?
Carles:
I think this will be very exciting. Our current Ethereum balance sheet situation is very good. If you look at the current Ethereum price, it is almost flat compared to 2021, right? And in four years, its price could reach Bitcoin's historical peak.
I believe Ethereum has the greatest potential for upside because it has not yet experienced explosive growth like Bitcoin but has many applications and projects building on it. As you mentioned, almost all stablecoins are built on Ethereum. Many institutions are pouring into the Ethereum ecosystem, and tokenized assets are primarily conducted on the Ethereum network. Therefore, as these trends develop and the market gradually tilts towards Ethereum, I believe Ethereum's potential is like a tightly compressed spring, ready to unleash significant energy at any moment.
This is not just hype, but rather a practice of tokenizing many real assets, which is not a short-term market trend. In my view, Ethereum is expected to become the core financial infrastructure supporting the operation of the digital economy. If you agree with this perspective, then Ethereum's price level in 2021 is still in a nascent stage, with huge potential for future growth. This is also why we just announced a plan to raise $100 million to purchase more Ethereum.
Tom Lee: Ethereum's 'Wall Street protection.'
Paul:
What role does Wall Street play in the Ethereum ecosystem? Tom Lee has some insights on this.
Tom Lee:
Wall Street is actually forming a mechanism that I call 'structural protection.' For example, the U.S. government may choose a strategy, such as using the existing 600,000 assets and willing to pay a 200% premium. This is much more cost-effective than directly paying a million dollars for Bitcoin. This mechanism is known as 'sovereign protection,' right? And in the Ethereum ecosystem, since it is a token that supports staking, if asset reserve companies hold 5% of ETH, their importance to the entire ecosystem will be very prominent. This influence could even multiply. If these companies operate on Ethereum like Goldman Sachs issues dollars, they would not only ensure the security of the Ethereum network but also promote its widespread adoption. Therefore, eventually, these companies could purchase a large amount of Ethereum. However, some state-owned entities already hold Ethereum, and perhaps they only need to buy from these state-owned entities. So it can be said that these state-owned entities actually have Wall Street protection.
Paul:
What do you think, Charles?
Carles:
To some extent, I agree with this view. However, I believe a key issue is overlooked, which is that details determine success or failure. Most institutions that buy and stake Ethereum do not participate in staking directly but rely on third parties for management. In fact, the staking market is currently almost monopolized by a few small players, although users can switch between different services. Therefore, simply holding cryptocurrency does not genuinely engage in staking. If you are just passively holding it and letting others manage and stake it for you, that is similar to the centralization issue among Bitcoin miners, and it is not truly decentralized. I believe unless you personally operate validating nodes and participate in the consensus mechanism, you are merely handing over control to others, and those who control staking truly hold the power.
Furthermore, who decides which transactions will ultimately be recorded on the blockchain? That's the core issue in our field. For example, builders like Titan and Beaver statistically account for over 90% of the blocks constructed if you include Beaver Build. This is the core issue we are focused on. Currently, our market share in this market is about 3%.
Demand for technical expertise.
Paul:
Will they not enter node operations? This seems to be a natural development direction for these reserve companies.
Carles:
Due to the high technical expertise required for node operations, these companies typically outsource the tasks to specialized teams rather than operate them personally. We ventured into this field in 2021 and only truly entered after a period of preparation. As for block building, we have been deeply engaged in this field for nearly two years.
This is not complicated. If someone says, 'I want to transform a NASDAQ company worth less than $10 million into a project worth $250 million and hope to complete it within a month.' This sounds simple; you just need to find an excellent management team, a reliable wallet service provider, and a stable infrastructure provider to initiate operations. Of course, these services come at a cost. But we choose to operate ourselves, avoiding outsourcing costs.
Polymarket dominates the political field.
Paul:
Currently, many significant changes are occurring within the Ethereum ecosystem, but I believe many people are still unaware of the profound implications of these changes. I would like to play a video that discusses Polymarket and how it influences political structures.
Video content:
"We are all trying to figure out the direction things are heading. You know, we all saw him involved, but it really only gained widespread attention in the past 72 hours."
"It is worth noting that (in the Polymarket prediction for the New York City mayoral election) at that time Andrew had the upper hand. I told my team that Zohran would win this race. We strategically chose not to participate in the crowded Democratic primary and decided to run as an independent candidate. At first, everyone thought it was laughable, and they asked me, 'What are you doing?' Now who would still laugh at me? I told Andrew, 'Are you really that arrogant? I am the mayor of New York City. Do you think I would just sit by while you just lost to Zohran by 12 points? That is extreme arrogance.'"
The gaming industry will surpass national economies & Michael Saylor is buying ETH?
Paul:
Now we have Polymarket, which can be considered Ethereum's guiding force in the political field. You can take a look at a tweet released by Ferguson on the Immutable platform. He mentioned what the scenario would be if (Grand Theft Auto) launched a game token? We are beginning to see some major Bitcoin supporters, such as Michael Saylor and Microstrategy, seemingly moving in this direction. How long do you think it will take for them to enter the Ethereum ecosystem? Will they choose to join?
Carles:
Extreme supporters of Bitcoin may never choose to join the Ethereum ecosystem, mainly because Bitcoin's total supply is fixed at 21 million, which is its cap. In contrast, Ethereum has a more flexible issuance mechanism that can even achieve a deflationary model. So if Michael Saylor turns to Ethereum, I would be very surprised because his attitude towards Ethereum does not seem positive. I generally categorize him as an extreme supporter of Bitcoin, and many of these individuals may never change their stance. However, for those who are more pragmatic, they will notice the practicality of Ethereum and realize its potential, saying, 'Wow, this technology is truly amazing! It can completely transform the way global assets flow.' This transformation could include tokenized securities, concert tickets, and even the issuance of stablecoins, all of which are great examples. I believe these technologies will become the new standard for global asset flow, but extreme supporters of Bitcoin may still not join.
Paul:
This is indeed interesting. I believe that as cryptocurrencies develop, especially with the leadership positions of Bitcoin and Ethereum becoming more apparent in the market, they are starting to enter Wall Street. I feel that all current trends point in this direction. And Ethereum remains very competitive throughout the ecosystem.
