BTCS (NASDAQ:BTCS) Is Making Moderate Use Of Debt

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. We can see that BTCS Inc. (NASDAQ:BTCS) does use debt in its business. But the real question is whether this debt is making the company risky.

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When Is Debt Dangerous?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. If things get really bad, the lenders can take control of the business. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Of course, plenty of companies use debt to fund growth, without any negative consequences. When we think about a company's use of debt, we first look at cash and debt together.

What Is BTCS's Net Debt?

The image below, which you can click on for greater detail, shows that at June 2025 BTCS had debt of US$8.80m, up from none in one year. However, it also had US$639.2k in cash, and so its net debt is US$8.16m.

How Strong Is BTCS' Balance Sheet?

The latest balance sheet data shows that BTCS had liabilities of US$4.94m due within a year, and liabilities of US$4.80m falling due after that. Offsetting this, it had US$639.2k in cash and US$156.3k in receivables that were due within 12 months. So it has liabilities totalling US$8.94m more than its cash and near-term receivables, combined.

Of course, BTCS has a market capitalization of US$216.0m, so these liabilities are probably manageable. But there are sufficient liabilities that we would certainly recommend shareholders continue to monitor the balance sheet, going forward. When analysing debt levels, the balance sheet is the obvious place to start. But it is future earnings, more than anything, that will determine BTCS's ability to maintain a healthy balance sheet going forward. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

View our latest analysis for BTCS

In the last year BTCS wasn't profitable at an EBIT level, but managed to grow its revenue by 355%, to US$7.5m. That's virtually the hole-in-one of revenue growth!

Caveat Emptor

While we can certainly appreciate BTCS's revenue growth, its earnings before interest and tax (EBIT) loss is not ideal. Indeed, it lost US$9.4m at the EBIT level. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. However, it doesn't help that it burned through US$5.1m of cash over the last year. So to be blunt we think it is risky. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. For instance, we've identified 3 warning signs for BTCS (2 don't sit too well with us) you should be aware of.

If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.