Company: BTBT
Filing Date: 2025-07-02
Form Type: S-8
Source: 0001213900-25-061020
Chunk: 63

Company: Bit Digital, Inc
Filing Date: 2025-07-02
Form: S-8
Chunk 63
---
>

There are risks related to technological obsolescence, the vulnerability of the global supply chain for bitcoin hardware disruption, and difficulty in obtaining new hardware which may have a negative effect on our business.

Our mining operations can only be successful and
ultimately profitable if the costs, including hardware and electricity costs, associated with mining digital assets are lower than the
price of a bitcoin. As our mining facility operates, our miners experience ordinary wear and tear, and may also face more significant
malfunctions caused by a number of extraneous factors beyond our control. We have purchased second-hand miners from third parties. The
degradation of our miners requires us to, over time, replace those miners which are no longer functional. Additionally, as the technology
evolves, we are required to acquire newer models of miners to remain competitive in the market. Reports have been released which indicate
that miner manufacturers or sellers adjust the prices of their miners according to bitcoin prices, so the cost of new machines is unpredictable
but could be extremely high. As a result, at times, we may obtain miners and other hardware from third parties at premium prices, to the
extent they are available. This upgrading process requires substantial capital investment, and we may face challenges. Further, the global
supply chain for bitcoin miners is presently heavily dependent on China-based manufacturers. In addition, there have been shortages of
the semiconductors which are key components in miner production. The global reliance on China as a main supplier of bitcoin miners has
been called into question, particularly in the wake of the COVID-19 pandemic. Should similar outbreaks or other disruptions to the China-based
global supply chain for bitcoin hardware on the spot market or otherwise occur, we may not be able to obtain adequate replacement parts
for our existing miners or to obtain additional miners from the manufacturer or third parties on a timely basis. Such events could have
a material adverse effect on our ability to pursue our business strategy, which could have a material adverse effect on our business and
the value of our Ordinary Shares.

The bitcoin we mine is subject to halving; the bitcoin reward for successfully uncovering a block will halve several times in the future and bitcoin’s value may not adjust to compensate us for the reduction in the rewards we receive from our mining efforts.

Halving is a process designed to control the overall
supply and reduce the risk of inflation in digital assets using a proof-of-work consensus algorithm. At a predetermined block, the mining
reward is cut in half, hence the term “hal