UPDATE 21st September 15:05 UTC: BTCS has indicated it has completed the merger with Spondoolies-Tech.
BTCS shareholders now own approximately 55.4% of the merged company, while Spondoolies-Tech shareholders own 44.6% of the new entity.
In a statement, BTCS CEO called the move a "major milestone" that would help reinvent the former bitcoin-specific retail website as a leading transaction processing firm.
Bitcoin Shop (BTCS) and Spondoolies-Tech have signed an agreement that would find the publicly traded bitcoin services firm and the Israeli mining hardware manufacturer merging and continuing under a united brand.
Evoking a classic Baron Rothschild quote, Allen said that in his estimation, the bitcoin mining sector offers the best profit-making opportunity, one compounded by the lack of interest among new investors in contributing to transaction processing on the bitcoin network.
Allen told CoinDesk:
Allen indicated his belief that Spondoolies was the best option among a limited number of mid-sized participants in the bitcoin mining hardware manufacturing space, noting the recent struggles experienced by US firms Butterfly Labs and Cointerra.
"Spondoolies never had late issues with their customers," Allen said. "In our minds, they have best product on the market. If you put it all together it really makes for a really solid offering."
The news follows BTCS' 27th April announcement that it had raised $2.3m in new capital through a private placement involving hedge funds and investors.
Though both developments were potentially positive signs for the company, Bitcoin Shop shares declined on the news, tumbling to $0.20 per share from a high of $0.28 earlier in the week.
Puzzle pieces image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.