Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 31

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 3
Chunk 31
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recent halving event occurred in April 2024, and Bitcoins are expected to be fully mined out by the year 2140. Therefore, Bitcoin mining
machines may become less productive as the available rewards for Bitcoin mining decrease.

If we cannot maintain the
scale and profitability of our cryptocurrency mining machines, results of operations and ability to continue to grow will suffer. Furthermore,
excess inventories, inventory markdowns, brand image deterioration and margin squeeze caused by declining economic returns for miners
or pricing competition for our cryptocurrency mining machines could all have a material adverse impact on our business, financial condition
and results of operations.

Cryptocurrency exchanges and wallets, and
to a lesser extent, the cryptocurrency network itself, may suffer from hacking and fraud risks, which may adversely erode user confidence
in cryptocurrency which would decrease the demand for our cryptocurrency mining machines.

Cryptocurrency transactions
are entirely digital and, as with any virtual system, are at risk from hackers, malware and operational glitches. Hackers can target cryptocurrency
exchanges and transactions, to gain access to thousands of accounts and digital wallets where cryptocurrency are stored. Cryptocurrency
transactions and accounts are not insured by any type of government program and all cryptocurrency transactions are permanent because
there is no third party or payment processor. Cryptocurrency has suffered from hacking and cyber-theft as such incidents have been reported
by several cryptocurrency exchanges and miners, highlighting concerns about the security of cryptocurrency and therefore affecting its
demand and price. Also, the price and exchange of cryptocurrency may be affected due to fraud risk. While cryptocurrency uses private
key encryption to verify owners and register transactions, fraudsters and scammers may attempt to sell false cryptocurrency. All of the
above may adversely affect the operation of the cryptocurrency network which would erode user confidence in cryptocurrency, which would
negatively affect demand for our products.

We face intense competition and our competitors
may employ aggressive pricing strategies, which can lead to a price reduction of our products and material adverse effect on our results
of operations.

We may look to enter into
markets with very competitive landscapes. Our competitors include many well-known domestic and international players, and we face competitors
that are larger than us and have advantages over us in terms of economies of scale and financial and other resources. We expect that competition
in our markets will continue to be intense, as we compete not only with existing players that have been focusing on cryptocurrency mining
or AI, but also new entrants that include well-established players in the semiconductor industry, or players who have not