Why is Bit Digital all-in on the Ethereum treasury strategy?
Written by: KarenZ, Foresight News
This week (July 7), NASDAQ-listed mining company Bit Digital (BTBT) announced the completion of its comprehensive transformation into an Ethereum treasury strategy and has accumulated over 100,000 ETH in its holdings.
This move not only marks a complete shift of its business focus from Bitcoin mining to the Ethereum ecosystem, showing strong confidence in the long-term potential of the Ethereum ecosystem, but also reflects the increasing institutional attractiveness of Ethereum.
This article will analyze Bit Digital's development history, transformation background, and core motivations for transitioning to Ethereum.
The Past and Present of Bit Digital
Formerly: 'China's First Car Loan Stock' in Crisis
Bit Digital's predecessor can be traced back to Dianniu Financial Limited (Golden Bull Limited). Dianniu Financial was established in November 2015 in Shanghai, with car collateral loans as its core business.
According to the International Financial News, Dianniu Financial disclosed on its official website that in January 2016, it received 20 million yuan in angel investment at its launch (co-invested by Zeng Erxin and Liu Xiaohui); in May 2016, it completed B round financing with joint investments from Huishi Equity Investment Fund (Shanghai) Co., Ltd. and Shaanxi Xifeng Investment Co., Ltd.; in December 2016, it secured another 200 million yuan in C round financing. However, there were also allegations of 'fraud in three rounds of financing' and 'false advertising'.
Listed on NASDAQ in March 2018, stock code 'DNJR', claiming to be 'China's First Car Loan Stock'.
However, the good times did not last long. In July 2019, Dianniu Financial was investigated by the Shanghai Public Security Bureau for suspected illegal public deposit collection amid the P2P industry explosion and cleansing in China. 17 suspects were taken into criminal coercive measures, and the actual controller was included in the 'Red Notice' list. The company's stock price plummeted, and it was once on the verge of delisting. In October of the same year, the company's board removed the former chairman and CEO Zeng Erxin, CFO Leng Jing, and director Liu Xiaohui, and subsequently formed a new management team.
Transformation: Car Leasing, Bitcoin Mining Business
After the collapse of the P2P business, Dianniu Financial gradually transitioned to car leasing and Bitcoin mining.
In the third quarter of 2020, Bit Digital, Inc. was renamed from Dianniu Financial, and its NASDAQ trading code was changed to 'BTBT', while it divested its original P2P lending business. The company headquarters was subsequently moved to New York, USA.
In September 2020, Bit Digital established its wholly-owned subsidiary Bit Digital USA, Inc. in Delaware, USA, planning to operate its mining machines in the U.S., conduct Bitcoin mining, and accelerate the strategic relocation of mining machines from China to North America.
In June 2021, along with China's comprehensive ban on cryptocurrency mining activities, Bit Digital suspended its remaining mining operations in China, further accelerating its strategic migration to North America.
From 2020 to 2021, Bit Digital expanded its scale through multiple financings for mining machine procurement and capacity expansion. As of the first quarter of 2021, Bit Digital had a total of 40,965 mining machines distributed in China's Xinjiang, Sichuan, and Yunnan provinces, as well as in the U.S. states of Texas, Nebraska, and Georgia, with Bitcoin mining becoming the core source of revenue for Bit Digital, generating $43.95 million in mining revenue in the first quarter. However, revenue decreased thereafter due to miner migration, production limits, and the overall increase in Bitcoin network hash rate.
It is worth mentioning that in April 2020, Yu Hong, who initiated the 'Three O'clock Sleepless Blockchain' WeChat group, joined Dianniu Financial as Chief Strategy Officer and Director. However, in February 2021, with a major management reshuffle at Bit Digital, Yu Hong resigned from his positions as Chief Strategy Officer and Director. In April of the same year, Dianniu Financial acquired its wholly-owned subsidiary XMAX Chain Limited located in Hong Kong, operating all Bitcoin mining businesses in mainland China through XMAX Hong Kong. Yu Hong was an early investor in XMAX Chain and once endorsed the project but later announced his separation from XMAX Chain. Of course, Dianniu Financial later clarified that Yu Hong had no connection with XMAX Hong Kong.
Diversification Exploration: Ethereum + Cloud Services + High-Performance Computing
Starting from the end of 2022, Bit Digital began reducing its reliance on single Bitcoin mining and initiated a diversified layout.
In December 2022, Bit Digital launched its Ethereum staking business.
In 2023, Bit Digital established its subsidiary WhiteFiber AI, Inc. (formerly Bit Digital AI, Inc.), venturing into cloud services.
In June 2024, WhiteFiber HPC, Inc. (formerly Bit Digital HPC, Inc.) was established, focusing on high-performance computing (HPC) business. In October of the same year, it acquired Canada's Enovum Data Centers Corp to strengthen HPC data center capabilities.
In March of this year, Bit Digital established WhiteFiber Canada, Inc., forming a multi-regional collaborative HPC and cloud services network.
Comprehensive transformation into Ethereum treasury management strategy company
In early July 2025, Bit Digital announced the completion of its transformation into an Ethereum treasury management strategy, recently raising approximately $172 million in total revenue and allocating net capital for purchasing Ethereum. Additionally, Bit Digital sold approximately 280 Bitcoin and used the proceeds to increase its ETH holdings.
Adding to the previously held 24,434 ETH (as of March 31, 2025), Bit Digital's total ETH holdings reached 100,603 coins.
At the same time, Bit Digital's official introduction has also been updated, 'Bit Digital is a listed digital asset platform focused on Ethereum-native asset management and staking strategies.'
Regarding HPC business, in February 2025, Bit Digital officially renamed its HPC business to WhiteFiber, Inc., covering its GPU cloud services and HPC data center platform Enovum Data Centers.
Why all-in on Ethereum?
Bit Digital CEO Sam Tabar clearly stated: 'We believe Ethereum has the ability to rewrite the entire financial system. Ethereum's programmable nature, increasing adoption rate, and staking yield model represent the future of digital assets. Bit Digital aligns itself with Ethereum's long-term potential and positions itself as an Ethereum fund management platform. Bit Digital plans to actively increase its holdings and ultimately become a leading global ETH holder.'
In Bit Digital's view, Ethereum is becoming a new strategic corporate asset class, similar to gold and government bonds in history, but more dynamic - leveraging the largest developer ecosystem globally (far exceeding other blockchains), Ethereum's technological innovations continue to iterate.
Of course, Bit Digital, originally focused on Bitcoin mining, transitioning to the Ethereum ecosystem, this strategic adjustment is influenced not only by the macro trends in the cryptocurrency industry but also by internal financial and operational considerations.
Bitcoin mining profitability under pressure
Intensifying competition for computing power + Bitcoin halving: Bitcoin mining difficulty continues to rise, leading to a decrease in miners' marginal profits.
Bitcoin mining heavily relies on cheap electricity, while Bit Digital was forced to relocate to North America in 2021 due to China's crackdown on mining farms, resulting in significantly increased operating costs and compliance costs.
Bit Digital's digital asset mining profitability continues to weaken: In the first quarter of 2025, Bit Digital's digital asset mining revenue was $7.77 million, a decrease of 64% compared to $21.89 million in the first quarter of 2024. Meanwhile, the costs incurred by digital asset revenue decreased from $12.98 million in the first quarter of 2024 to $6.12 million. The cost-to-income ratio, which reflects profitability, was 59% in the first quarter of 2024 and rose to 78% in the first quarter of 2025, excluding depreciation and amortization costs (totaling $7.24 million across all businesses). A higher cost-to-income ratio indicates that the cost corresponding to unit revenue is higher, meaning weaker profitability.
The company's business structure is unbalanced, and the proportion of digital mining revenue continues to decline: In the first quarter of 2025, this business revenue accounted for only 31% of total revenue, compared to 72% in the same period of 2024, urgently needing new growth points to support performance.
Attractiveness of Ethereum Ecosystem
In 2024, ETH staking income amounted to $600,000, a 72% increase compared to the same period last year. As of March 31, 2025, Bit Digital had approximately 21,568 ETH staked in the native staking protocol. After increasing its Ethereum holdings to 100,603 coins, Bit Digital stated that it is not just purchasing tokens but is allocating its reserves to a protocol.
Ethereum's staking mechanism allows holders to earn a relatively stable annualized return by locking tokens. Compared to the high energy consumption and uncertainty of Bitcoin mining, staking offers more predictable returns. High-energy-consuming mining activities are restricted under carbon neutrality goals, while Ethereum's proof-of-stake mechanism consumes very little energy, aligning more with global sustainable development trends.
Institutional allocation shifting towards diversification: With the increasing adoption of the Ethereum ecosystem, institutional investors are gradually shifting from Bitcoin-dominated allocations to diversification, beginning to value Ethereum's long-term potential.
In summary, the development history of Bit Digital is a process of transformation and breakthrough from adversity: from a crisis-ridden Chinese P2P platform to being listed on NASDAQ, then transforming into a Bitcoin mining company, laying out HPC and AI, and further transforming comprehensively into Ethereum when mining revenues fell short of expectations. Its strategic adjustments have always followed trends. However, this bet on Ethereum also faces new challenges - performance will be highly tied to Ethereum prices.
For the Crypto industry, Bit Digital's transformation is both a microcosm of the increasing attractiveness of the Ethereum ecosystem and reflects the evolving allocation logic of institutions and mining companies from 'mining for profit' to 'long-term asset holding.' In the future, as the Ethereum ecosystem matures further, perhaps more institutions will join this track.
Reference Link:
https://bit-digital.com/press-releases/bit-digital-shifts-entire-treasury-to-ethereum-becomes-one-of-the-largest-eth-holders-among-public-companies/
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001710350/000121390025044155/ea0241656-10q_bitdigital.htm#fact-identifier-502
https://www.prnewswire.com/news/bit-digital%2C-inc./?page=6&pagesize=25
https://bit-digital.com/author/operationbit-digital-com/
https://mp.weixin.qq.com/s/c5g3EzvSGXOF56OlH0DMQw
