Bit Digital Shifts From Bitcoin Mining to Ethereum Staking Amid Market Reaction
Bit Digital, once a prominent Bitcoin mining company, faced a sharp 15% drop in share price in just 24 hours after announcing a $150 million public offering and a strategic pivot to Ethereum staking. The company’s stock continued to slide throughout the week, recording a 19% drop over five days, closing at $1.99 on Friday.
$150M Public Offering Sparks Investor Sell-Off
On Thursday, Bit Digital revealed a public offering of 75 million ordinary shares at $2 each, aiming to raise $150 million.
- The funding will be used to purchase Ethereum (ETH), reinforcing its exit from Bitcoin mining.
- Following the announcement, Bit Digital’s stock plunged to $1.86, before slightly recovering in after-hours trading.
This dilution in share value, combined with the company’s sudden strategic shift, appears to have shaken investor confidence.
Ethereum Staking Now Core Business Strategy
Earlier in the week, Bit Digital declared it would transition into a “pure-play Ethereum staking and treasury company”.
- The company began building ETH staking infrastructure in 2022.
- As of March 31, Bit Digital held 24,434 ETH and 417 BTC, worth approximately $44.6 million and $34.5 million, respectively.
The firm plans to sell all its BTC and increase its ETH holdings to around 42,000 ETH, valued at roughly $103 million at current market prices.
Market Response: Price Slump and Ranking Drop
Investor response has been largely negative:
- Bit Digital shares dropped 4% after the ETH pivot announcement.
- The overall 19% weekly decline reduced its market cap standing, dropping it from the 12th to the 13th-largest Bitcoin mining firm.
According to CompaniesMarketCap, Bit Digital’s stock is now down over 40% year-to-date, indicating broader market concerns about its shift from mining to staking.
Strategic Risk or Forward-Looking Bet?
While some investors may view the Ethereum pivot as risky, Bit Digital appears committed to its long-term Ethereum-based vision, focusing on treasury growth and staking yield.
Despite the immediate stock decline, the move signals a broader trend in crypto firms transitioning toward staking and digital asset management, as the proof-of-stake model gains ground.
Bit Digital’s bold bet on Ethereum staking could pay off in the long term—but short-term market sentiment suggests investors need more assurance before backing this transition.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.