Company: BTBT
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001013762-25-000307
Chunk: 210

Company: Bit Digital, Inc
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1
Chunk 210
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or tracking digital assets markets form and come to represent a significant proportion of the demand for digital assets, large redemptions
of the securities of those vehicles and the subsequent sale of digital assets by such vehicles could negatively affect digital asset prices
and therefore affect the value of the digital asset inventory (i.e., bitcoin and ETH) we hold. The recent introduction of a spot bitcoin
exchange traded fund (“ETF”) and the pending approval of an ETH ETF may attract speculative traders who seek short-term gains
based on price movements. This increased speculative activity could lead to short-term price volatility. Such events 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 any digital assets we mine or otherwise acquire or hold for
our own account.

44

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