Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 511

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1A
Chunk 511
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 actions. Finally, blockchains are new technologies
and there is always an outside risk of a catastrophic chain failure that could put locked or staked funds at risk. The speculative and
volatile nature of ETH and blockchain may materially and adversely affect the value of the Company’s securities.

The staked ETH is subject
to the volatility risks set forth under “Speculative and Volatile Nature of ETH” and the risks related to hacking set
forth above under “Cyberattacks and security breaches of our system, or those impacting our third parties, could adversely impact
our brand and reputation and our business, operating results, and financial condition” that could result in a loss of staked ETH.

49

The risks involved with
liquid staking differ from direct staking. Liquid staking allows participants, including the Company, to maintain the liquidity of their
digital assets while still earning staking rewards. However, it is subject to the following consequence risks apart from direct staking:

●Liquid
staking requires a certain level of technical expertise to manage the staking process effectively. This can be a barrier for some investors,
particularly those who are new to the world of digital asset investing.

●The
price of the staked derivative may decrease from its original price. This may happen because the new token has a lower market price.

●In
we lose our liquid token, we will also lose our staked token. This can result from bad trades, rebalancing losses when farming in liquidity
pools, and liquidations at lending protocols.

●Token
holders will likely choose to stake their tokens on liquid staking protocols. As a result, the balance of validator shares taking part
in the network may be disrupted, giving room for undue control from more powerful validators.

Development of
the Ethereum Platform

The Ethereum platform
is an open-source project being developed by a network of software developers, including Vitalik Buterin, a founder of Ethereum. Mr. Buterin
or another key participant within the core development group could cease to be involved with the Ethereum platform. Factions could form
within the Ethereum community, resulting in different and competing versions of Ethereum being adopted by network participants. Furthermore,
network participants running the Ethereum software may choose not to update their versions of the software, resulting in different versions
of the Ethereum software running on the network. Any of the foregoing developments could have a significant negative impact on the viability
and overall health of the Ethereum platform, the value of ETH and the Company’s business model and assets.

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