Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 512

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1A
Chunk 512
---
 chain (the
PoS successor to the Ethereum PoW chain) launched in December 2020 and the “merging” of the Ethereum PoW chain into Ethereum
2.0 occurred on September 15, 2022. In addition, Ethereum’s Shanghai hard fork, also referred to as “Shapella,” has
been finalized on April 12, 2023, enabling withdrawals for users who have “staked” their ETH to secure and validate transactions
on the blockchain. Although management believes that these changes to the Ethereum platform will positively impact its potential for mainstream
adoption, no assurance can be given that such impact will materialize. If the Company cannot successfully anticipate and react to the
impacts of this shift, its business and results of operations may be adversely affected.   

Uncertainty Regarding
the Growth of Blockchain and Web 3 Technologies

The further development
and use of blockchain, Web 3 technologies and digital assets are subject to a variety of factors that are difficult to evaluate and predict,
many of which are beyond the Company’s control. The slowing or stopping of the development or acceptance of blockchain networks,
specifically Ethereum, and blockchain assets would be expected to have a material adverse effect on the Company. Furthermore, blockchain
and Web 3 technologies, including Ethereum, may never be implemented to a scale that provides identifiable economic benefit to blockchain-based
businesses, including the Company.

The Ethereum network
and ETH as digital asset have a limited history. Due to this short history, it is not clear how all elements of ETH will unfold over time,
specifically with regard to governance between miners, developers and users, as well as the long-term security model as the rate of inflation
of ETH decreases. Since the ETH community has successfully navigated a considerable number of technical and political challenges since
its inception, the Company believes that it will continue to engineer its way around future challenges. The history of open-source software
development would indicate that vibrant communities are able to change the software under development at a pace sufficient to stay relevant.
The continuation of such vibrant communities is not guaranteed, and insufficient software development or any other unforeseen challenges
that the community is not able to navigate could have an adverse impact on the business of the Company.

50

Potential Decrease
in Global Demand for ETH

As a currency, ETH must
serve as a means of exchange, store of value, and unit of account. Many people using ETH as money-over-internet-protocol (MoIP) do so