Bit Digital, Inc. Announces Commencement of Ethereum Staking Operations, Partnership with Blockdaemon
NEW YORK, Dec. 22, 2022 /PRNewswire/ -- Bit Digital, Inc. (Nasdaq: BTBT) ("Bit Digital" or the "Company"), a digital asset mining company headquartered in New York, is pleased to announce that it has formally commenced Ethereum staking operations. Bit Digital intends to delegate, or stake, its ETH holdings to an Ethereum validator node to help secure and strengthen the blockchain network. Stakers are compensated for this commitment in the form of a reward of the native network token.
This marks an expansion from Bit Digital's core bitcoin mining operation to also validating transactions on the Ethereum blockchain. While the Company remains bullish on bitcoin, and supporting the bitcoin blockchain, it expects to derive revenue from the Ethereum network via validator rewards.
The Company's staking operations are enhanced by a new partnership with Blockdaemon, the leading institutional-grade blockchain infrastructure company for node management and staking. Following a similar mechanism to traditional Ethereum staking, Bit Digital will also participate in liquid staking via Portara, the liquid staking protocol developed by Blockdaemon and StakeWise and the first of its kind tailored to institutions. Liquid staking allows participants to 1) achieve greater capital efficiency by utilizing their staked ETH as collateral and 2) withdraw from staked positions earlier than natively possible by trading their staked ETH tokens on the secondary market.
Unlike other liquid staking solutions, Portara's key differentiator is that it ensures that users can only interact with verified counterparties. As a result, several regulated institutions which were previously unable to participate in liquid staking have now on-boarded with Portara and are actively liquid staking.
As of December 20, the Company had 7,904 ETH and 2,004 sETH-h with a combined worth of approximately $12.1 million. 2,164 ETH were actively staked as of that date, using either native staking or liquid staking protocols. The Company intends to continue accumulating Ethereum and stake substantially all of its ETH position over time.
Bryan Bullett, Bit Digital's CEO, commented: "We are excited to expand from our core bitcoin mining business into validating transactions on the Ethereum blockchain. This diversification into another blue-chip digital asset ecosystem carries the goal of creating a new, predictable, and recurring stream of digital rewards. To be clear, we will continue to invest in and opportunistically expand our mining operations. Together, we believe bitcoin mining and ETH staking are complementary business lines that will enhance our overall margin and return profiles. It's an exciting development for Bit Digital, and one that we ultimately believe will maximize value for all stakeholders."
Bit Digital's Chief Strategy Officer, Sam Tabar, added: "We are extremely bullish on the Ethereum network. Following the network's transition to a Proof-of-Stake consensus mechanism, we expect ETH will exhibit deflationary properties over time as net issuance is substantially reduced and ETH-denominated fees are burned. The notion that the transition will decrease the network's energy consumption by 99% is also extremely compelling to us given our focus on sustainability. Ethereum serves as the foundation for the smart contract economy and DeFi broadly, and we are excited to increase our exposure to the network and support yet another leading blockchain."
Blockdaemon CEO and Founder Konstantin Richter shared that "Blockdaemon is proud to partner with Bit Digital and provide them with best-in-class institutional-grade infrastructure for their new strategic PoS holdings. This new partnership gives Bit Digital full access to Blockdaemon's suite of institutional staking solutions allowing them to increase their earned rewards from their crypto holdings. Blockdaemon was built from the ground up to provide institutions with products and services to enable them to scale and build blockchain-based businesses."
About Bit Digital
Bit Digital, Inc. is a bitcoin mining company headquartered in New York City. Our mining operations are located in North America. For additional information, please contact email@example.com or visit our website at www.bit-digital.com.
Blockdaemon is the leading independent blockchain node infrastructure to stake, scale, and deploy nodes with institutional-grade security and monitoring. Supporting 60+ cutting-edge blockchain networks in the cloud and on bare metal servers globally, Blockdaemon is used by exchanges, custodians, crypto platforms, financial institutions and developers to connect commercial stakeholders to blockchains. We power the blockchain economy by simplifying the process of deploying nodes and creating scalable enterprise blockchain solutions via APIs, high availability clusters, auto-decentralization and auto-healing of nodes. For more information, please visit https://blockdaemon.com/. Press inquiries can be directed to Press@blockdaemon.com.
Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks, uncertainties and forward-looking statements described under "Risk Factors" in Item 3.D of our most recent Annual Report on Form 20-F for the fiscal year ended December 31, 2021. If any material risk was to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline and you could lose part or all of your investment. The risks and uncertainties we describe are not the only ones facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results in the future. Future changes in the network-wide mining difficulty rate or bitcoin hash rate may also materially affect the future performance of Bit Digital's production of bitcoin. Actual operating results will vary depending on many factors including network difficulty rate, total hash rate of the network, the operations of our facilities, the status of our miners, and other factors. See "Safe Harbor Statement" below.
Safe Harbor Statement
This press release may contain certain "forward-looking statements" relating to the business of Bit Digital, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects," or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
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SOURCE Bit Digital, Inc.