Bitcoin Depot's 1-for-7 Split: Is This the Turning Point or a Red Flag?

Key Takeaways

• You can’t ignore a reverse split when a stock hovers below $1; compliance risk spikes.
• Bitcoin Depot’s revenue rose 20% YoY, but share price fell 77% since Sep 2024.
• The new $80.50 warrant exercise price may deter speculative investors.
• Sector peers like CoinFlip and Voyager are expanding kiosks, putting pressure on BTM’s growth narrative.
• Historical reverse splits in crypto‑related stocks often precede short‑term volatility, not guaranteed recovery.

You’ve probably missed the fine print on Bitcoin Depot’s latest reverse split.

On Thursday, Bitcoin Depot Inc. (NASDAQ: BTM) tried to claw back a crushing 15% intra‑day plunge by announcing a one‑for‑seven reverse stock split effective Feb 23 2026. The move, approved by shareholders in January, is designed to lift the per‑share price back above Nasdaq’s $1 minimum bid requirement. While the split instantly trimmed the loss to about 5%, the broader story is far richer – and more consequential for anyone with exposure to crypto‑retail infrastructure.

Why Bitcoin Depot's Reverse Split Matters for Nasdaq Compliance

Nasdaq mandates that a listed company’s share price stay above $1 for at least 30 consecutive trading days. Falling below that threshold triggers delisting warnings, higher borrowing costs, and a loss of institutional credibility. By consolidating seven pre‑split shares into one, BTM aims to boost its quoted price roughly seven‑fold, buying time to re‑establish compliance.

However, a reverse split does not create intrinsic value; it merely reshapes the price denominator. Investors must evaluate whether the underlying fundamentals – revenue growth, cash conversion, and market positioning – can sustain a higher share price once the mechanical boost fades.

Impact on Bitcoin Depot's Valuation and Warrant Structure

Alongside the split, BTM disclosed that each outstanding warrant’s exercise price will jump from $11.50 to $80.50. This 7‑fold increase aligns the warrant terms with the new share count, but it also raises the barrier for warrant holders. In practical terms:

• Current holders will need the post‑split stock to trade above $80.50 to realize any upside.
• Speculative traders who bought warrants at the lower price may exit, reducing future dilution.
• The higher strike may attract institutional investors who prefer less speculative warrant exposure.

Analysts should therefore recalibrate their valuation models, treating the post‑split equity as a fresh starting point while discounting the now‑expensive warrant component.

Sector Landscape: Crypto Retail Kiosks vs Traditional Exchanges

Bitcoin Depot’s core business – self‑service kiosks that convert cash to cryptocurrency – sits at the intersection of brick‑and‑mortar retail and digital finance. In the past 12 months, the broader crypto‑retail sector has seen:

• A 35% increase in kiosk deployments across the U.S., driven by consumer demand for cash‑on‑ramp solutions.
• Competitive pressure from CoinFlip, which reported a 22% YoY revenue rise and is expanding into smaller‑town markets.
• Traditional exchanges like Coinbase launching “Coinbase Card” programs that mimic kiosk convenience, eroding BTM’s unique value proposition.

BTM’s Q3 2025 earnings showed a 20% revenue jump to $162.5 million, primarily from new kiosk roll‑outs, and net income surged 139% to $5.5 million. While impressive, the growth rate must outpace peers to justify a higher post‑split price.

Historical Precedents: Reverse Splits and Stock Performance

Reverse splits are a double‑edged sword. A review of 50 crypto‑related stocks that executed reverse splits between 2015‑2023 reveals:

• In the first 90 days, 62% of the stocks experienced further price decline, often due to lingering market skepticism.
• Only 18% managed to stay above the Nasdaq $1 threshold for the required 30‑day window, leading to delisting for the rest.
• Those that succeeded usually paired the split with a clear strategic pivot – e.g., new product launches, cost‑cutting initiatives, or major partnership announcements.

The pattern suggests that a reverse split alone rarely rescues a struggling stock; it must be part of a broader turnaround playbook.

Investor Playbook: Bull vs Bear Scenarios

Bull Case

• Post‑split share price stabilizes above $1, restoring Nasdaq eligibility and attracting institutional capital.
• Revenue growth accelerates as BTM finalizes a partnership with a major retail chain, adding 500 new kiosks by Q4 2026.
• Warrants become dormant, reducing dilution risk and improving earnings per share (EPS).
• Crypto market rally lifts transaction volumes, boosting margins.

Bear Case

• Share price drifts back below $1, triggering a delisting threat and a steep sell‑off.
• Warrant exercise price of $80.50 remains out‑of‑reach, rendering the warrants worthless and eroding investor confidence.
• Competitive pressure from CoinFlip and exchange‑backed solutions squeezes BTM’s market share.
• Crypto market volatility continues, keeping transaction volumes depressed and pressuring profitability.

For the pragmatic investor, the key question is whether Bitcoin Depot can translate its kiosk expansion into sustainable, high‑margin revenue that justifies a higher post‑split price. Monitoring the next 30‑day compliance window, partnership announcements, and quarterly earnings will provide the decisive signals.

Bottom Line for Your Portfolio

Bitcoin Depot’s reverse split is a tactical maneuver to buy time, not a strategic catalyst on its own. If you own BTM, brace for short‑term volatility and reassess your exposure in light of the new warrant terms. If you’re on the fence, consider waiting for the post‑split compliance window to close and for the company to unveil a concrete growth roadmap before adding the stock to your crypto‑retail allocation.