Company: BTBT
Filing Date: 2025-07-02
Form Type: S-8
Source: 0001213900-25-061020
Chunk: 71

Company: Bit Digital, Inc
Filing Date: 2025-07-02
Form: S-8
Chunk 71
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 and by carefully monitoring the staking activities
performed by the Company in reliance on such services.

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Risks under the Federal securities laws associated with Staking

The Merge and the switch from PoW to PoS did not
change our characterization of ETH as a digital asset. We intend to hold our staked ETH for our own account. In the event we exchange
ETH for other digital assets (such as liquid staking tokens) which may be deemed to be securities, it would be for our own account. In
all instances, we will perform a risk-based analysis to evaluate whether the digital asset may be deemed to be a “security”
under the Federal securities laws prior to mining the digital asset. We do not believe if we hold for our own account a particular digital
asset which may be deemed to be a security, it will be a risk to our business operations. Nevertheless, we will continue to implement
a compliance infrastructure to ensure full compliance with the federal securities laws. In the event our staking program is found to not
be in compliance with the federal securities laws, we could face legal or regulatory consequences. We would also need to undertake a regulatory
review to ensure compliance with the Federal securities laws if and when we decide to offer staking-as-a-service for value to individuals.
The Company would need to install a fully compliant organic infrastructure or hire third-party contractors.

Speculative and Volatile Nature of ETH

To date, the Company has deployed a portion of
the capital it has raised into ETH. The price of ETH is subject to significant volatility. In addition, there is no guarantee that the
Company will be able to sell its ETH at prices quoted on various cryptocurrency trading platforms or at all if it determines to do so.
The supply of ETH is currently controlled by the source code of the Ethereum platform, and there is a risk that the developers of the
code and the participants in the Ethereum network could develop and/or adopt new versions of the Ethereum software that significantly
increase the supply of ETH in circulation, negatively impacting the trading price of ETH. Any significant decrease in the price of ETH
may materially and adversely affect the value of the Company’s securities and, in turn, the Company’s business and financial
condition.

The ETH markets are sensitive to new developments,
and since volumes are still maturing, any significant changes in market sentiment (by way of sensationalism in the media or otherwise)
can induce large swings in volume and subsequent price changes. Such volatility can