Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 30

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 3
Chunk 30
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 required to record a new block and it is affected by the total amount of computing
power in the cryptocurrency network. For example, the Bitcoin algorithm is designed so that one block is generated, on average, every
ten minutes, no matter how much computing power is in the network. Thus, as more computing power joins the network, and assuming the rate
of block creation does not change (remaining at one block generated every ten minutes), the amount of computing power required to generate
each block and hence the mining difficulty increases. In other words, based on the current design of the Bitcoin network, Bitcoin mining
difficulty would increase together with the total computing power available in the Bitcoin network, which is in turn affected by the number
of Bitcoin mining machines in operation. Additionally, the amount of Bitcoin awarded for solving each block is designed to decline approximately
every four years, with the most recent halving event occurred in April 2024. As a result, a strong growth in sales of our cryptocurrency
mining machines can contribute to further growth in the total computing power in the network, thereby driving up the difficulty of cryptocurrency
mining and coupled with the decrease in cryptocurrency reward, resulting in downward pressure on the expected economic return of cryptocurrency
mining and the demand for, and pricing of, our products, under the assumption that the price of cryptocurrency does not increase enough.

If the market for cryptocurrency mining
machines ceases to exist or diminishes significantly, our business and results of operations would be adversely affected.

We generate our revenues from
the sales of our cryptocurrency mining machines. We may continue to generate a portion of our revenue from the sales of our cryptocurrency
mining machines in the foreseeable future. If the market for cryptocurrency mining machines ceases to exist or diminishes significantly,
we would experience a significant loss of sales, cancelation of orders, or loss of customers for our cryptocurrency mining machines. Adverse
factors that may affect the market for cryptocurrency mining machines include that, for example, cryptocurrency fails to gain wide market
acceptance and fails to become a generally accepted medium of exchange in the global economy due to certain inherent limitations to cryptocurrencies,
thereby causing value loss or become worthless, which could adversely affect the sustainability of our business; or over time, the reward
for cryptocurrency mining (in terms of the amount of cryptocurrency awarded) will decline, which may reduce the incentive to mine cryptocurrencies.
Specifically, the amount of Bitcoin awarded for solving each block is designed to decline approximately every four years, with the most