Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 1374

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 3
Chunk 1374
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 at the time its fair value is being measured. In testing for impairment,
the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment
exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary.
If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized,
the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. 

F-11

ASC 820 defines “principal market”
as the market with the greatest volume and level of activity for the asset or liability. The determination of the principal market (and,
as a result, the market participants in the principal market) is made from the perspective of the reporting entity. The digital assets
held by the Company are traded on a number of active markets globally. The Company does not use any exchanges to buy or sell digital assets.
Instead, the Company uses Amber Group’s OTC desk for selling or exchanging bitcoins for U.S. dollars or vice versa. The Company
determines CoinMarketCap as its principal market, as it is one of the earliest and the most trusted sources by users, institutions, and
media for comparing thousands of crypto assets and selected by the U.S. government.

The Company recognizes revenue by utilizing daily
close prices obtained from CoinMarketCap, except for the year 2022. During that specific year, the Company also used hourly close price
from CryptoCompare to recognize revenue from our digital asset mining activities. The Company believed the hourly close price can better
reflect revenue recognized from our digital asset mining activities as compared to daily close price from CoinMarketCap.

Purchases of digital assets by the Company and
digital assets awarded to the Company through its mining activities and staking activities are included within operating activities on
the accompanying consolidated statements of cash flows. The changes of digital assets are included within operating activities in the
accompanying consolidated statements of cash flows. After adopting ASU 2023-08, changes in fair value and realized gains or losses are
now reported as “gains (losses) on digital assets” in the consolidated statements of operations. Prior to this adoption, realized
gains or losses were reported as “realized gains (losses) on exchange of digital assets” in the consolidated statements of
operations. The Company accounts for its gains or losses in accordance with the first