Bit Digital heavily buys ETH, jumping to the second-largest ETH holding company.
According to the official announcement, Bit Digital (NASDAQ: BTBT) announced yesterday the completion of its transformation to an Ethereum reserve strategy, raising approximately $172 million to purchase ETH and using the 280 BTC it has sold for purchasing ETH.
By the end of the first quarter, Bit Digital held only 24,434 ETH, but it has now surged to 100,603 ETH, with a total market value of approximately $257 million. Unupdated data from CoinGecko shows that the company's ETH holdings will approach Coinbase, firmly establishing it as the second-largest publicly traded company holding Ethereum.
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This strategic shift shows companies' high confidence in the Ethereum ecosystem. CEO Sam Tabar stated: 'BTBT has now fully transformed into an Ethereum financial reserve company and is committed to becoming the world's most representative ETH holding company.'
We believe Ethereum has the potential to rewrite the entire financial system. Ethereum's programmability, growing adoption rate, and staking yield model represent the future of digital assets.
Are companies embracing cryptocurrency reserve strategies, and are institutions starting to show interest in ETH?
The trend of companies incorporating cryptocurrency assets into their balance sheets continues to heat up; in just the past month, more than 21 institutions have added Bitcoin holdings. Among them, the leader MicroStrategy (MSTR) currently holds as much as 597,000 BTC.
However, compared to BTC, institutional allocation to ETH remains conservative. But the recent market atmosphere seems to be changing; U.S. ETH ETFs have recorded net inflows for seven consecutive weeks, indicating growing institutional interest in ETH.
Matthew Sigel: BTBT is underestimated by the market, and its HPC business is a cash cow.
Matthew Sigel, head of digital assets at VanEck, expressed his views, pointing out that BTBT's current valuation may be significantly underestimated: 'Currently, BTBT's market capitalization is about $1 billion, with ETH assets accounting for approximately $257 million, but its cloud and high-performance computing (HPC) business WhiteFiber has even greater explosive potential.'
Sigel estimates that WhiteFiber's annual recurring revenue (ARR) could reach $150 million by 2026. Even considering scale and liquidity, applying a 25% discount to the 9 times ARR valuation of peer NBIS, WhiteFiber still has a value of $1.01 billion. In other words, the market has not yet reflected its ETH asset value.
Conversely, if the valuation of ETH is 2 times NAV (approximately $514 million), then compared to NBIS's 9 times, WhiteFiber's trading price is only 3.3 times ARR:
BTBT has now applied to spin off WhiteFiber for an IPO, which may help unlock this multiple and valuation.
ETH reserve companies are flourishing: Is BTBT a bet or an opportunity?
Against the backdrop of a volatile crypto market, Bit Digital's 'All in ETH' strategy is undoubtedly a high-risk gamble but also a strong statement about Ethereum's future position. Previously, the well-known Wall Street strategist and co-founder of financial research firm Fundstrat, Tom Lee, led the Bitcoin miner BitMine to similarly shift from BTC to ETH, trying to create a micro-strategy in the Ethereum space.
With WhiteFiber successfully listed and reasonably priced, and ETH reserve companies becoming a new trend, BTBT's dual business structure (mining + cloud business) is expected to open up room for market capitalization re-evaluation and generate future stock price imagination.
Further reading
Wall Street tycoons invest in BitMine miners! Planning to invest $250 million to create an Ethereum version of micro-strategy.
This article is reprinted with permission from: (Chain News)
Original title: (Bitcoin miners transforming into Ethereum whales: Bit Digital holds 100,000 ETH, valuation still underestimated?)
Original author: Crumax
『Bitcoin miners transformation! Bit Digital holds 100,000 ETH, is the valuation still underestimated?』This article was first published on 'Crypto City'
