Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 209

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1
Chunk 209
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 future. One of our digital asset custodians, Cactus Custody, is self-insured for $4 million plus annual
additions. Any uninsured losses may have an adverse effect on our results of operations and/or financial condition. Fireblocks offers
Fireblocks Institutional Digital Asset Program which is insured by leading insurance companies which are A.M. Bests rated “A”
(excellent). There is an aggregate of $30,000,000 digital asset crime insurance for theft of digital assets, external breach of Fireblocks’
software or any malicious or intentional misbehavior or fraud by employees. Fireblocks has $12,500,000 of aggregate insurance for errors
and omissions; professional liability insurance and cyber/privacy liability insurance.

Digital assets
face significant scaling obstacles that can lead to high fees or slow transaction settlement times.

Digital assets face significant
scaling obstacles that can lead to high fees or slow transaction settlement times and attempts to increase the volume of transactions
may not be effective. Scaling digital assets is essential to the widespread acceptance of digital assets as a means of payment, which
widespread acceptance is necessary to the continued growth and development of our business. Many bitcoin networks face significant scaling
challenges. For example, digital assets are limited with respect to how many transactions can occur per second. Participants in the bitcoin
ecosystem debate potential approaches to increasing the average number of transactions per second that the network can handle and have
implemented mechanisms or are researching ways to increase scale, such as increasing the allowable sizes of blocks, and therefore the
number of transactions per block, and sharding (a horizontal partition of data in a database or search engine), which would not require
every single transaction to be included in every single miner’s or validator’s block. However, there is no guarantee that
any of the mechanisms in place or being explored for increasing the scale of settlement of bitcoin transactions will be effective, or
how long they will take to become effective, which could adversely affect an investment in our securities.

The price of digital
assets may be affected by the sale of such digital assets by other vehicles investing in digital assets or tracking bitcoin markets.

The global market for
digital assets is characterized by supply constraints that differ from those present in the markets for commodities or other assets such
as gold and silver. The mathematical protocols under which certain digital assets are mined permit the creation of a limited, predetermined
amount of currency, while others have no limit established on total supply. To the extent that other vehicles investing in digital assets