- Bit Digital will cease mining Bitcoin and utilize $150M to purchase Ethereum for staking.
- The firm may grow its Ethereum holdings to over 42,000 if it converts all its Bitcoin.
- The company had filed for WhiteFiber’s IPO to support Ethereum and AI computing tools.
Bit Digital has raised $150 million in a public offering to fund its exit from Bitcoin mining and expand Ethereum staking operations. The offering included 75 million shares priced at $2 each, with an additional 11.25 million shares available to underwriters through a 30-day option, according to the company’s official release.
Proceeds from the offering will be used to purchase Ethereum for long-term holding and staking. Bit Digital has stated that it intends to become a “pure play Ethereum staking and treasury company.” The firm began buying ETH and started building staking infrastructure in 2022.
As of March 31, Bit Digital held 24,434.2 ETH and 417.6 BTC in its reserves. If the company converts all of its Bitcoin holdings to ETH, its total ETH reserves would rise to over 42,000 tokens. The firm confirmed that all net proceeds from the public sale will be used to acquire more Ether. But why is a leading mining company moving away from Bitcoin now?
Strategic Exit from Bitcoin Mining and Infrastructure Issues
Bit Digital’s transition away from BTC mining follows significant operational and tactical challenges in managing its mining infrastructure. The company had previously relied on third-party hosting services, including Coinmint, to power its mining fleet.
That relationship ended late last year, which disrupted the firm’s Bitcoin operations. With rising energy costs and hardware expenses impacting profitability, Bit Digital appears to be shifting toward a more cost-efficient model. By focusing on Ethereum staking, the firm aims to reduce capital and energy overheads.
In June 2024, Bit Digital sold 452 BTC in exchange for ETH at a rate of 0.048 ETH per BTC. Since then, the value of ETH in relation to BTC has plummeted, now down to less than 0.023. However, the company has been expanding its exposure to Ethereum.
The firm reiterated that its long-term objective is to divest fully from Bitcoin mining. Its strategic focus now centers on building ETH staking infrastructure and managing ETH as a treasury asset.
Related: Norway to Halt Bitcoin Mining Growth Amid Energy Concerns
HPC Unit WhiteFiber Prepares for IPO Amid ETH Focus
In parallel with its Ethereum transition, Bit Digital has confirmed that WhiteFiber, its high-performance computing (HPC) subsidiary, has filed a confidential draft registration with the U.S. Securities and Exchange Commission. The unit aims to go public, though the timing and terms remain undisclosed.
The registration aligns with Bit Digital’s strategy to scale computing resources toward Ethereum staking. The switch also positions the company to capitalize on the increase in demand for computing services aligned with AI.
Bit Digital’s market strategy now encompasses staking mechanisms and ETH-focused treasury management, with the firm committing to selling stock to acquire more Ether. According to Google Finance data, the company’s stock (NASDAQ: BTBT) fell 15.32% on June 26, closing at $1.99. Shares traded between $1.88 and $2.01 before recovering slightly to $2.02 after hours.
The company’s current market cap stands at $413.48 million, with an average volume of 15.51 million shares. BTBT’s 52-week price range spans from $1.69 to $5.74. No dividend yield or P/E ratio is listed.
