Company: BTBT
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076608
Chunk: 83

Company: Bit Digital, Inc
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1
Chunk 83
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Cloud Technology, a leading provider of data center solutions. We believe that support with proof of concept (POC) access from Quanta
will enable us to meet and exceed expectations around delivery and timeline, performance and reliability.  

Digital Asset Business

The digital asset business is comprised primarily
of two distinct but highly complementary operations: (i) digital asset mining (the “Digital Asset Mining Operations”); and
(ii) ETH staking (the “ETH Staking Operations”).

In June of 2025, the Company announced that it
had initiated a strategic transition to become a pure play ETH staking and treasury company. In connection with the transition, the Company
intends to convert its BTC holdings into ETH over time and has commenced a strategic alternatives process for its bitcoin mining
operations, which is expected to result in a sale or wind-down, with any net proceeds to be re-deployed into ETH.

Digital Asset Mining Business

We commenced our bitcoin (“BTC”) mining
business in February 2020. We initiated limited Ethereum mining operations in January 2022, however discontinued the operations by September
2022 due to Ethereum blockchain switching from proof-of-work (“PoW”) consensus mechanism to proof-of-stake (“PoS”)
validation. Our mining operations, hosted by third-party providers, use specialized computers, known as miners, to generate digital assets.
Our miners use application specific integrated circuit (“ASIC”) chips. These chips enable the miners to apply high computational
power, expressed as “hash rate”, to provide transaction verification services (generally known as “solving a block”)
which helps support the blockchain. For every block added, the blockchain provides an award equal to a set number of digital assets per
block. Miners with a greater hash rate generally have a higher chance of solving a block and receiving an award.

We operate our mining assets with the primary
intent of accumulating digital assets which we may sell for fiat currency from time to time depending on market conditions and management’s
determination of our cash flow needs, and/or exchange into ETH or USD Coin (“USDC”). Our mining strategy has been to mine
bitcoins as quickly and as many as possible given the fixed supply of bitcoins. In view of historically long delivery lead times to purchase
miners from manufacturers like Bitmain Technologies Limited (“Bitmain”) and MicroBT Electronics Technology Co., Ltd (“MicroBT”),
and other considerations, we have chosen to acquire miners on the spot market, which can