Bit Digital made a major strategic shift this week when it departed from Bitcoin mining and chose to commit exclusively to Ethereum. The company publicly announced its intention of selling off its Bitcoin mining gear and utilizing that money to purchase more Ether for its treasury.
Bit Digital also plans to sell some of its shares to acquire even more Ethereum. The company started to build its Ethereum staking business and treasury in 2022, and its new path was forged.
As of March 31, Bit Digital also put 24,434 ETH and 417 BTC on reserve, showing diversification during its transition period. By swapping its full stack of Bitcoin, the company was able to grow its ETH holdings by over 18,000 ETH and reach over 42,000 ETH.
The stock market reacted negatively to Bit Digital’s announcement, and its shares fell 3.69% during regular trading hours and closed at $2.35. Its stock dropped another 3.83% after regular trading hours and closed at $2.26.
That placed its year-to-date loss at about 25%, and its current price was 39% lower than its January high level at $3.88.
Bit Digital prioritizes Ethereum (ETH) over Bitcoin (BTC)
Investors appear to be concerned about the company’s divergence from Bitcoin mining, which used to demand higher attention and market capitalization.
The most recent earnings announcement of Bit Digital also shows lower performance, where its revenue during the March quarter fell 18% year-over-year and its net profit margin fell 240%.
In April, Bit Digital spent $53 million on purchasing an industrial facility located in Madison, North Carolina. It will construct artificial intelligence and high-performance computing operations there, which will be an addition to its wider technology efforts outside its Ethereum focus.
Other firms are also increasing their holdings of Ethereum. The largest publicly traded company to be a holder of ETH was SharpLink Gaming when it acquired $463 million of Ether on June 13.
It then followed suit days later and acquired another $30 million worth. Bit Digital is now third among publicly trading companies’ holdings of ETH, after SharpLink and Coinbase.
Bit Digital’s transition is a significant event in crypto history, where companies evolve to changing blockchain economics and staking opportunities.
