Ethereum has not yet experienced explosive growth similar to Bitcoin, but many applications and projects have already been built on its foundation.

Compiled by: Deep Tide TechFlow

Guest: Carles Allen, CEO and Chairman of BTCS

Host: Paul Barron

Podcast Source: Paul Barron Network

Original Title: $100mil Ethereum Mega-Strategy!🔥$BTCS CEO Charles Allen INTERVIEW

Broadcast Date: July 8, 2025

Key Points Summary

Companies with strategic reserves in Ethereum have become darlings of the U.S. stock market, with related stock prices experiencing varying degrees of increase.

The key drivers and leaders behind these companies play a significant role in this wave of crypto asset reserve enthusiasm.

(For related reading: ETH reserve companies become new favorites in the U.S. stock market, reviewing the businesses and key players behind 4 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, we invited BTCS CEO Charles Allen to explain how the company's strategy aims to increase the per-share ETH holdings, drive scalable revenue growth, and minimize dilution of shareholder equity to create long-term value for the company.

Highlights of Insights

• Ethereum has the largest potential for upside because it has not yet experienced explosive growth like Bitcoin, but many applications and projects have already been built on it.

• Ethereum is expected to become the core financial infrastructure supporting the operation of the digital economy.

• Ethereum operates on a light asset model, where your assets are productive rather than non-productive. They appreciate rather than depreciate.

• There could be around $2 billion to $10 billion flowing into digital asset-related fiscal strategies and public offices. As more institutions and investors join, they often become "follow-the-leader" players.

• The blocks we build on 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 from Sharplink and Bitmine typically serve as company chairpersons but are not directly responsible for daily operations. In contrast, our team is deeply involved in the technical aspects, directly 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 operate validation nodes through the Rocket Pool platform, choosing to personally complete the entire staking process. As we raise more funds, we have the ability to significantly increase revenue and the number of Ethereum per share.

• If a company wants to acquire us, like Tom Lee's company, which is valued at 8 to 10 times NAV, we would seriously consider such an opportunity.

• Unless you personally operate validation nodes and participate in the consensus mechanism, you are merely handing over control to others, while those who control the staking truly hold the power.

• If someone says, "I want to transform a NASDAQ company valued at less than $10 million into a $250 million project and hope to complete it in a month," it sounds simple. You just need to find a great management team, a reliable wallet service provider, and a stable infrastructure provider to kickstart operations.

• Extreme supporters of Bitcoin may never choose to join the Ethereum ecosystem.

Ethereum Reserve Strategy

Paul:

In this episode, we have invited Charles Allen, CEO of BTCS Inc. It has been a while since our last in-depth discussion, and many changes have occurred in your company during this time. Can you give us an overview of BTCS Inc.'s overall development? Specifically, how does it compare to other digital asset companies, such as those related to Ethereum? Currently, Bitcoin's market cap is about $46 billion; what is your strategy and current status?

Charles:

Our Ethereum reserve strategy is actually part of the company's operations. Recently, we adjusted the way we market this strategy 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 running independent validation nodes, providing node support for Rocket Pool, and participating in block building, all of which are vertically integrated. 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 that focused more on Bitcoin, I noticed the differences between your business models for Ethereum and Bitcoin. A significant factor is the difference in asset structure, especially the distinction between how Bitcoin is held and how assets operate within the Ethereum ecosystem. Does your business model shift imply that Bitcoin's market value has been underestimated?

Charles:

I 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 don't think many people truly understood what we were doing. Now, with the involvement of Tom Lee and Joe Lubin, Wall Street has gained more recognition of Ethereum's value in the public market. We have adopted a business model centered around productive assets, which is completely different from the traditional model of merely holding Bitcoin on the balance sheet or being a Bitcoin miner.

We were the first publicly traded Bitcoin miner globally but ultimately chose to abandon that capital-intensive model. Ethereum operates on a light asset model, where your assets are productive rather than non-productive. They appreciate rather than depreciate.

Tom Lee on Circle IPO

Paul:

This is the core difference between Bitcoin fiscal companies and Ethereum fiscal companies. To better understand this, I would like to play a short video of Tom Lee, where he shares his views on future strategies. Please take a look.

Tom Lee (video segment original voice translation):

Are you involved in Circle's IPO or holding its stock? Circle went public 10 days ago at $31 per share, and now the stock price has 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 enter the top 1% of the wealthy globally. Circle's stock is seen as a god-tier investment target, and the stablecoin market is also growing rapidly. Currently, the total market cap of stablecoins is about $250 billion, accounting for about 30% of the gas fees on the Ethereum network. 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 a direct beneficiary of Wall Street's attempts to tokenize cryptocurrencies.

Charles:

They are using Ethereum's L2 solutions to achieve the tokenization of equity.

BTCS Renaming and Record Revenue

Paul:

When analyzing your business model and operations, I noticed that you have multiple revenue centers. I also saw a tweet detailing how these centers are constructed. 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:

That's a very interesting question. In fact, BTCS stands for Blockchain Technology Consensus Solutions, which is quite fitting. We focus on the consensus mechanism of blockchain technology, providing consensus services, running infrastructure, and being responsible for block building, so this name makes a lot of sense.

We have indeed considered changing the company name, but it requires a significant investment of effort and resources. While many have suggested that we include "Ethereum" in the name, we have chosen to maintain the status quo for now. Additionally, we are also building blocks 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 last year's fourth-quarter revenue of $2.3 million.

To help everyone understand better, the blocks we build on 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 validation nodes can consistently 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 that can operate at 120 volts. If we add an adapter, we can connect to other chains with higher scalability. In fact, we have successfully implemented this technology application for Binance. You can imagine this as upgrading the device to a version that can operate at 240 volts. This is also why we insist on using the name "Blockchain Technology Consensus Solutions" rather than directly naming it an Ethereum-related brand.

Despite this, Ethereum remains our core financial asset. Our goal is to continuously increase the number of Ethereum per share while driving sustained revenue growth. We hope 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. Can you elaborate on the main differences between you?

Charles:

We are indeed quite different from these companies. First, executives at Sharplink and Bitmine typically serve as company chairpersons but are not directly responsible for daily operations. For example, I serve as a board member at another company and only attend four meetings a year, so their actual involvement in company operations is limited. In contrast, our team is deeply involved in the technical aspects, directly 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 market strategy is also distinctly 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 engage in lending through the Aave platform, with a current lending ratio close to 40%. This year, we plan to raise $100 million, expecting the lending ratio to remain around 40%, with funding sourced through the issuance of convertible bonds. Convertible bonds are a type of 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 approximately $7.8 million and actively participated in this financing activity. By combining these funds with lending on the Aave platform and ATM (automated teller machine) sales, we can optimize operational efficiency while keeping equity dilution to a minimum, thereby enhancing the company's balance sheet. This strategy is particularly advantageous when compared to competitors.

Buying an Additional $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 gradually moving up, and it looks like you are about to surpass Arbitrum DAO. Based on previous discussions, do you have plans to further purchase Ethereum to improve your ranking on this list?

Charles:

As I mentioned earlier, we recently announced plans to raise $100 million to purchase additional Ethereum, which will support our staking operations. We plan to run validation 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 complete the entire staking process. I believe that as we raise more funds, we will have the ability to significantly increase revenue and the number of Ethereum per share.

Tom Lee: ETH Company Mergers Coming Soon?

Tom Lee:

The third strategy you are currently employing is leveraging the relationship between market price 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 their net asset value (SLA). For example, if a company's stock price is three times its net asset value, then you might consider acquiring these 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 achieved on the Bitcoin network. This approach not only expands the business scale but also further solidifies Ethereum's core position in the DeFi ecosystem.

BTCS and Tom Lee Merger?

Paul:

Tom Lee mentioned potential mergers with other stakeholders. I'm curious about your perspective, as I see that you have the technology and tools to 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 has a valuation of 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 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 utilize leverage mechanisms that some 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, thereby justifying premium trading.

For us, financing strategy and operational efficiency are key. This is also what distinguishes us from other Ethereum financial companies. Many companies simply place assets on their balance sheets, while we focus on operating validation nodes. Since 2021, we have been deeply involved in the Ethereum space, and we have been in the crypto industry since 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's Shift to Ethereum

Paul:

The key question is, how much Bitcoin will be transferred from the Bitcoin network to Ethereum? If we observe companies that are investing in digital assets, especially those adopting new financial models, how much Bitcoin might flow into Ethereum? What do you think the market size will be?

Charles:

In my judgment, there could be around $2 billion to $10 billion flowing into digital asset-related fiscal strategies and public offices. As more institutions and investors join, they often become "follow-the-leader" players. For Bitcoin, you can see that Michael Saylor's strategy has performed very well, along with the active participation of MetaPlanet and David Bailey. However, in the public market, such transactions typically follow a fixed success pattern. Usually, a high-profile individual serves as the chairman of the new company, which typically has a market cap of less than $10 million, and its business model may have already encountered difficulties. Subsequently, through a series of operations, the company's market cap may rapidly grow, and when these companies submit resale registration statements, many investors choose to exit the market, essentially opening the door for share resales.

Currently, these companies typically trade at prices close to net asset value (NAV) and are beginning to rebound. But I believe that trading at a premium far above NAV is usually just a short-term speculative behavior, rather than a sustainable long-term business model. Overall, if luck is on their side, these companies might reach twice the valuation of MicroStrategy, but if luck is not on their side, they might only reach three times. However, trading at 10 times NAV is a very difficult proposition because savvy hedge funds will intervene; they might short your stock or engage in arbitrage by purchasing other stocks with different NAV premiums.

Therefore, overall, if the market is rational, although the market is not always rational, digital asset-related fiscal companies should trade at some form of premium, which is usually 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 Excited About Tokenized Stocks

Paul:

This is a video from the Schwab network discussing the potential impact of tokenization on Ethereum, which could even have a greater impact on Bitcoin. Let's take a look.

Video Content:

“They plan to tokenize private securities, especially companies like SpaceX. They are also looking for more targets, including some AI companies that are currently only accessible to accredited investors, while ordinary investors cannot access these opportunities for now.”

“I can imagine that we will see more and more similar announcements in the future. Will this affect the demand for Bitcoin? That’s the question I want to raise. Will we see some of the demand that was originally directed towards Bitcoin shift towards 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 option, but that has changed. I think the latest trend of tokenization is a very noteworthy area, with many exciting discussions happening every week.”

The Ethereum Boom is Coming

Paul:

Bitcoin may face some degree of impact. And Schwab is paying attention to 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 a very exciting thing. Our current balance sheet situation regarding Ethereum is very good. If you look at the current price of Ethereum, it is almost flat compared to 2021, right? And if we look four years ahead, its price could reach Bitcoin's historical peak.

I believe that Ethereum has the largest potential for upside because it has not yet experienced explosive growth like Bitcoin, but many applications and projects have already been built on it. As you mentioned, almost all stablecoins are built on Ethereum. Many institutions are flocking to 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 release tremendous energy at any moment.

This is not just hype, but based on many real asset tokenization practices, which is not a short-term market fad. 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 is still at a starting stage at the price levels of 2021, with enormous growth potential ahead. This is also why we just announced plans 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 might choose a strategy that involves using the existing 600,000 assets and is willing to pay a 200% premium. This is far more cost-effective than directly paying a million dollars for Bitcoin. This mechanism is known as "sovereign protection," right? In the Ethereum ecosystem, because 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 application. Therefore, ultimately, these companies might 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's protection.

Paul:

What do you think, Charles?

Carles:

To some extent, I agree with this perspective. However, I think a key issue is overlooked, which is that details determine success or failure. Most institutions that purchase and stake Ethereum do not directly participate in staking themselves 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. So, merely holding cryptocurrency does not truly participate in staking. If you are just passively holding and letting other institutions manage and stake for you, it is similar to the centralization issue of Bitcoin miners and does not represent true decentralization. I believe that unless you personally operate validation nodes and participate in the consensus mechanism, you are simply 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 is the field we are in. For example, block builders like Titan and Beaver, statistically, if you include Beaver Build, over 90% of the blocks are constructed by these two participants. This is the core issue we are focused on. Currently, our market share in this area is about 3%.

Demand for Technical Expertise

Paul:

Aren't they going to enter node operations? This seems to be a natural direction for these reserve companies.

Carles:

Since node operations require a high level of technical expertise, these companies typically outsource the tasks to professional teams rather than operating them themselves. We entered this field in 2021 and took some time to prepare before truly entering. As for block building, we have been deeply involved in this area for nearly two years.

It's not complicated. If someone says, "I want to transform a NASDAQ company with a market cap of less than $10 million into a project worth $250 million and want to complete it in a month," it sounds simple. You just need to find a great management team, a reliable wallet service provider, and a stable infrastructure provider to kick off operations. Of course, these services come at a cost. But we choose to operate ourselves, avoiding outsourcing fees.

Polymarket Dominates the Political Sphere

Paul:

Currently, many significant changes are happening in the Ethereum ecosystem, but I think many people are still unaware of the profound impact of these changes. I want to play a video that discusses Polymarket and how it affects the political structure.

Video Content:

“We are all trying to figure out the direction of things. You know, we all saw him involved, but it really only gained widespread attention in the past 72 hours.”

“It’s worth noting that (in the predictions for the New York City mayoral election on Polymarket) Andrew was ahead in the polls at that time. 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 ridiculous, and they asked me, ‘What are you doing?’ Now, who would still mock me? I told Andrew, ‘Are you really that arrogant? I am the mayor of New York City. Do you think I would sit idly 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 seen as Ethereum's guiding force in the political realm. You can take a look at a tweet from Ferguson on the Immutable platform. He mentioned, what would the scenario be if Grand Theft Auto (GTA) launched a game token? We are starting to see some major Bitcoin supporters, like 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, primarily because Bitcoin's total supply is fixed at 21 million, which is its cap. In contrast, Ethereum has a more flexible issuance mechanism, and it can even implement a deflationary model. So, if Michael Saylor were to turn to Ethereum, I would be very surprised because his attitude towards Ethereum does not seem positive. I usually 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 utility of Ethereum and realize its potential, saying, “Wow, this technology is amazing! It can completely transform the way global assets flow.” This transformation could include tokenized securities, concert tickets, and even the issuance of stablecoins, which are all 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 think as cryptocurrencies develop, especially as Bitcoin and Ethereum's leadership in the market becomes more apparent, they are starting to enter Wall Street. I feel that all current trends point in this direction. And Ethereum still maintains a very strong competitive position within the entire ecosystem.

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