DigitalBTC’s publicly traded shares on the Australian Securities Exchange (ASX) have fallen to their lowest levels since mid-2013 as the bitcoin price plunge takes its toll.
Shares (ASX:DCC) have fallen from $0.014 (AUD) apiece to $0.091 in the past four days of trade, a drop of 35%. While drops of such scale are not uncommon for penny stocks, investors have reason to worry as the shares have been stuck in decline since peaking in March last year.
It was at that time that the company, formerly Macro Energy Ltd., underwent a reverse takeover and rebranded as Digital CC Ltd. Becoming a rare example of a publicly traded Bitcoin company, the shares spiked multifold (in typical crypto fashion) to $0.44 apiece. The shares formally relaunched for trade in mid-June. They are now nearly 80% off their March 2014 peak.
The company’s earnings have been hurt by the deteriorating price of bitcoin, the asset central to its profitability. Bitcoin’s traded price has lost more than two thirds of its value since the March takeover, leading to several consecutive quarters of negative earnings.
The ASX reportedly inquired of the company if any undisclosed information may be affecting the share prices. The company reportedly responded by pointing to the recent 20%+ price plunge. Digital CC secretary Rachel Jellef said:
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“The current bitcoin price impacts the profitability of the company’s ongoing inventory, which is what the company believes is the reason for the recent price movement.”
Reducing Bitcoin Exposure
The company’s stated business strategy envisions income from mining and trading activities. In addition, it is working on rolling out “retail consumer products including digital currency mobile applications.” It is reportedly working to accelerate development for the latter, which may offer more opportunity than its current operations that are heavily dependent on bitcoin’s price.
In September, it formed a partnership with altcoin exchange Cryptsy to launch its Mintsy solution, which offers tradable mining products and infrastructure. The solution is part of a broader suite of proposed digitalX products.
The company is one of several feeling the pressure of dangerously low prices. Last week, prominent mining pool Ghash.io expectedly suspended operations due to low profitability.
DigitalBTC’s market cap currently stands at $7.68 million.