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Strategic Shift at Bit Digital: Focus on Ethereum and AI Instead of Bitcoin Mining
Bit Digital, Inc. (NASDAQ:BTBT) announced on Thursday that it is exiting the Bitcoin mining business to concentrate on Ethereum infrastructure and AI computing power through its majority stake in WhiteFiber (NASDAQ:WYFI). The company is currently valued at $698.86 million and trades at a price-to-earnings ratio (P/E) of just 3.53, indicating high volatility with a beta of 3.96, according to InvestingPro data.
In his annual letter to shareholders, CEO Sam Tabar outlined the company's transformation into what he termed a "strategic asset company," focusing on two areas: "economic infrastructure through Ethereum and intelligent infrastructure through AI computing power." The company reported holding over 150,000 ETH as of the third quarter, with most of it staked to generate protocol-native yields. This positions Bit Digital as one of the first publicly traded crypto companies to strategically pivot towards Ethereum rather than maintaining a pure Bitcoin focus.
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"With our exit from Bitcoin mining, we have shifted capital into infrastructure that offers more flexibility, durability, and long-term relevance," Tabar stated in the letter.
Regarding its AI investments, Bit Digital reaffirmed its commitment to WhiteFiber, in which it holds a majority stake. The company stated that it "will not sell any WhiteFiber shares in 2026" and "intends to remain a long-term owner as the business continues to scale." To support this strategic shift, the company completed the issuance of an unsecured convertible bond in 2025, which it described as "one of the first cases of this type of innovative financing" in its industry.
This strategic realignment reflects the view that mining has become "a less efficient use of capital compared to opportunities that allow for active participation, yield generation, and operational leverage," as noted in the shareholder letter.
Key Takeaways:
- Bit Digital is exiting Bitcoin mining to focus on Ethereum and AI.
- The company holds over 150,000 ETH, primarily staked for yields.
- CEO Sam Tabar emphasizes the shift towards more flexible and durable infrastructure.
Price Drop in Cryptocurrencies Affects Bitcoin Miners' Stocks
The stocks of Bitcoin mining companies have sharply declined following a drop in the price of the world's largest cryptocurrency, which fell to a low of $84,233, representing a 5.5% decrease today. This continues a downward trend that began in early October. Shares of Strategy fell by 9%, while MARA Holdings and Riot Platforms lost 6% and 7%, respectively. Other mining companies experienced similar losses, with Bitmine Immersion and Cipher Mining both down by 9%, CleanSpark down by 8%, TeraWulf down by 7%, and IREN Limited down by 6%. The stock of the crypto exchange Coinbase also dropped by 6.5% amid the broader sell-off.
The price decline in cryptocurrencies is particularly notable as Bitcoin's price stagnated, even as tech stocks and precious metals gained in recent weeks. It appears that cryptocurrencies are now following the downward trend of the technology sector, with both digital assets and tech stocks under selling pressure. Smaller digital assets saw even steeper declines, with Ether, Dogecoin, Cardano, and Solana each dropping by at least 6% or more. The widespread sell-off in the crypto market is particularly impacting mining companies, whose profitability is closely tied to Bitcoin prices.
The weakness in the crypto market comes despite the previous resilience of other risk assets, indicating a potential shift in investor sentiment specifically towards digital assets. Mining companies' stocks, which typically amplify Bitcoin's price movements due to their operational leverage, have fallen more sharply than the underlying cryptocurrency itself.
Key Takeaways:
- Bitcoin mining stocks have dropped significantly due to a decline in cryptocurrency prices.
- Bitcoin fell to a low of $84,233, marking a 5.5% decrease.
- Smaller digital assets like Ether and Dogecoin experienced even larger declines.
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