Bit Digital, Inc. Announces Monthly Production Update for February 2024

Rhea-AI Summary

Bit Digital, Inc. (BTBT) reported a decrease in BTC production in February 2024 but maintained a strong financial position with significant digital asset holdings and cash equivalents. The company also highlighted its Proof-of-Stake initiatives and AI revenue generation.

Insights

Financial Analyst

The decrease in Bit Digital's BTC production by 11.7% compared to the prior month is a notable development. This reduction could be attributed to various factors such as increased difficulty in mining, operational challenges, or strategic shifts. Investors should consider the implications of this downward trend in production, as it may affect the company's revenue and profitability. Moreover, the reported active hash rate of approximately 2.73 EH/s provides an indication of the company's mining power, which is essential for understanding its potential to generate future digital assets.

From a financial perspective, the treasury holdings of BTC and ETH, with a combined fair market value of over $100 million, represent significant assets on the company's balance sheet. The diversification of holdings between BTC and ETH may offer some risk mitigation against the volatility inherent in the cryptocurrency markets. However, the fluctuating nature of cryptocurrency prices could lead to substantial changes in the valuation of these assets, impacting the company's financial health.

Market Research Analyst

Bit Digital's engagement in Proof-of-Stake (PoS) protocols is a strategic move that aligns with the broader industry's shift towards more energy-efficient blockchain validation methods. With approximately 12,784 ETH actively staked, the company is not only earning a steady return, as evidenced by the 4.4% blended APY, but also positioning itself as a participant in the governance and security of the associated blockchain networks. The aggregate staking rewards of approximately 43.4 ETH add another revenue stream, which could be particularly valuable during periods when direct mining yields are lower.

The update on Bit Digital AI's performance, with 251 servers actively generating an estimated $4.0 million of unaudited revenue, signals the company's diversification into AI infrastructure. This move could potentially offset volatility in digital asset markets and provide a more stable revenue base. However, the specifics of the AI contract and the nature of the AI services provided would be crucial in evaluating the sustainability and growth potential of this revenue stream.

Cryptocurrency Expert

The data presented by Bit Digital offers a snapshot of the company's operational status within the cryptocurrency mining and staking industry. The BTC equivalent of digital asset holdings provides a useful metric for investors to gauge the company's exposure to the cryptocurrency market. Given the volatility of cryptocurrency prices, the valuation of these assets can significantly impact the company's market capitalization and investor sentiment.

It is also worth noting the company's cash and cash equivalents of $34.3 million, which is a critical factor in assessing its liquidity and ability to fund operations or expansion without diluting shareholder value through additional stock offerings or incurring debt. This financial cushion can be especially important in the capital-intensive cryptocurrency mining industry, where equipment upgrades and energy costs can be substantial.

NEW YORK, March 5, 2024 /PRNewswire/ -- Bit Digital, Inc. (Nasdaq: BTBT) ("Bit Digital" or the "Company"), a sustainable platform for digital assets and artificial intelligence ("AI") infrastructure headquartered in New York, announced its unaudited digital asset production and corporate updates for the month of February 2024.

 Corporate Highlights for February 2024

• In February 2024, the Company produced 128.7 BTC, an 11.7% decrease compared to the prior month.
• The Company's active hash rate was approximately 2.73 EH/s as of February 29, 2024.
• Treasury holdings^[1] of BTC and ETH were 847.7 and 15,593.1 with a fair market value of approximately $51.9 million and $52.1 million, respectively, on February 29, 2024.
• The BTC equivalent^[2] of our digital asset holdings as of February 29, 2024, was approximately 1,722.3 or approximately $105.4 million.
• The Company had cash and cash equivalents of $34.3 million as of February 29, 2024.

Proof-of-Stake Highlights

• The Company had approximately 12,784 ETH actively staked in native and liquid staking protocols as of February 29, 2024. Approximately 12,384 were natively staked and 400 ETH were deployed in liquid staking protocols as of that date.
• Bit Digital earned a blended APY of approximately 4.4% on its staked ETH position for the month of February 2024.
• The Company earned aggregate staking rewards of approximately 43.4 ETH during February 2024.

Bit Digital AI Update

• As of February 29, 2024, the Company had 251 servers actively generating revenue from its initial Bit Digital AI contract. The Company earned an estimated $4.0 million of unaudited revenue from this contract during the month of February 2024.

About Bit Digital

Bit Digital, Inc. is a sustainable platform for digital assets and artificial intelligence ("AI") infrastructure headquartered in New York City. Our bitcoin mining operations are located in the US, Canada, and Iceland. The Company has also established a business line, Bit Digital AI, that offers specialized cloud-infrastructure services for artificial intelligence applications.  For additional information, please contact ir@bit-digital.com or visit our website at www.bit-digital.com.

Investor Notice

Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks, uncertainties and forward-looking statements described under "Risk Factors" in Item 3.D of our most recent Annual Report on Form 20-F for the fiscal year ended December 31, 2022. If any material risk was to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline and you could lose part or all of your investment. The risks and uncertainties we describe are not the only ones facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results in the future. Future changes in the network-wide mining difficulty rate or bitcoin hash rate may also materially affect the future performance of Bit Digital's production of bitcoin. Actual operating results will vary depending on many factors including network difficulty rate, total hash rate of the network, the operations of our facilities, the status of our miners, and other factors.

Safe Harbor Statement

This press release may contain certain "forward-looking statements" relating to the business of Bit Digital, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects," or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

^[1] "Treasury holdings" excludes approximately 2,701 ETH that were transferred to an internally managed fund.

^[2] "BTC equivalent" is a hypothetical illustration of the value of our digital asset portfolio in bitcoin terms. BTC equivalent is defined as if all non-BTC digital assets, comprised of ETH, LsETH, and USDC, were converted into BTC as of February 29, 2024, and added to our existing BTC balance. Conversion values are found using the closing price on coinmarketcap.com.

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SOURCE Bit Digital, Inc.

FAQ

How much BTC did Bit Digital produce in February 2024?

Bit Digital produced 128.7 BTC in February 2024.

What was Bit Digital's active hash rate as of February 29, 2024?

Bit Digital's active hash rate was approximately 2.73 EH/s as of February 29, 2024.

What were Bit Digital's treasury holdings of BTC and ETH on February 29, 2024?

Bit Digital's treasury holdings of BTC and ETH were 847.7 and 15,593.1 with a fair market value of approximately $51.9 million and $52.1 million, respectively, on February 29, 2024.

How much cash and cash equivalents did Bit Digital have on February 29, 2024?

Bit Digital had cash and cash equivalents of $34.3 million as of February 29, 2024.

How many ETH were actively staked by Bit Digital in native and liquid staking protocols on February 29, 2024?

Bit Digital had approximately 12,784 ETH actively staked in native and liquid staking protocols as of February 29, 2024.

What was Bit Digital's blended APY on its staked ETH position for February 2024?

Bit Digital earned a blended APY of approximately 4.4% on its staked ETH position for February 2024.

How much revenue did Bit Digital earn from its Bit Digital AI contract in February 2024?

Bit Digital earned an estimated $4.0 million of unaudited revenue from its Bit Digital AI contract during February 2024.