Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 202

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1
Chunk 202
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ulators seeking to profit from the short- or long-term holding of the asset. Price volatility undermines any bitcoin’s
role as a medium of exchange, as retailers are much less likely to accept it as a form of payment. Market capitalization for a bitcoin
as a medium of exchange and payment method may always be low.

The relative lack of
acceptance of bitcoins in the retail and commercial marketplace, or a reduction of such use, limits the ability of end users to use them
to pay for goods and services. Such lack of acceptance or decline in acceptances could have a material adverse effect on our ability to
continue as a going concern or to pursue our business strategy at all, which could have a material adverse effect on our business, prospects
or operations and potentially the value of bitcoins we mine or otherwise acquire or hold for our own account.

Transactional fees
may decrease demand for bitcoin and prevent expansion.

Currently, miners
receive both rewards of new bitcoin and transaction fees paid in bitcoin by persons engaging in bitcoin transactions on the bitcoin
blockchain for being the first to solve bitcoin blocks. As the number of bitcoins currency rewards awarded for solving a block in a
blockchain decreases, the incentive for miners to continue to contribute to the bitcoin network may transition from a set reward and
transaction fees to solely transaction fees. This transition could be accomplished by miners independently electing to record in the
blocks they solve only those transactions that include payment of the highest transaction fees. If transaction fees paid for bitcoin
transactions become too high, the marketplace may be reluctant to accept bitcoin as a means of payment and existing users may be
motivated to switch from bitcoin to another digital asset or to fiat currency. Either the requirement from miners of higher
transaction fees in exchange for recording transactions in a blockchain or a software upgrade that automatically charges fees for
all transactions may decrease demand for bitcoin and prevent the expansion of the bitcoin network to retail merchants and commercial
businesses, resulting in a reduction in the price of bitcoin that could adversely impact an investment in our securities. Decreased
use of and demand for bitcoin may adversely affect its value and result in a reduction in the price of bitcoin and, consequently,
the value of our Ordinary Shares.

40

The decentralized nature
of the governance of bitcoin systems may lead to ineffective decision making that slows development or prevents a network from overcoming
emergent obstacles. Governance of many bitcoin systems is by voluntary consensus and open competition with no clear leadership structure
or authority. To the extent lack of clarity in corporate governance