Digital asset company Bit Digital has pivoted its corporate treasury strategy from Bitcoin to Ether, stating the shift reflects its belief in Ethereum’s potential to “rewrite the entire financial system.”
Bit Digital allocated $172 million from a recent public offering and proceeds from selling 280 Bitcoin (BTC) to acquire Ether (ETH). The company detailed this investment on Monday.
At the end of Q1, Bit Digital held 24,434 ETH, an amount that has since expanded to 100,603 ETH. Following news of the pivot, its stock (traded under BTBT) increased by over 29%, lifting its market capitalization back above $1 billion.
Bit Digital is now the second-largest corporate holder of ETH, trailing only Coinbase Global, according to CoinGecko data.
The company had been accumulating and staking ETH since 2022. Bit Digital CEO Sam Tabar emphasized the company’s alignment with Ethereum’s long-term vision, aiming “to become the most preeminent ETH holding company in the world.”
Related: Vitalik Buterin proposes gas cap mechanism to enhance Ethereum security and stability
Crypto Treasury Strategies Gain Traction
The momentum behind corporate crypto treasury strategies continues, though Bitcoin remains the favored asset. Industry data indicates at least 21 entities have bolstered their BTC reserves in the past month, with software company MicroStrategy (MSTR) amassing 597,323 BTC.
However, certain analysts warn concerns are growing that this investing approach may be becoming overused, especially for firms lacking a robust business model or a defined BTC management strategy.
Corporate treasury strategies for alternative cryptocurrencies, beyond Bitcoin, are relatively rare. Nevertheless, industry reports highlight that one new company aims to raise $100 million specifically to accumulate Binance Coin (BNB), mimicking the established BTC treasury model.
Institutional interest in Ethereum has thus far stayed relatively subdued based on inflows into exchange-traded funds since their approval last year. Nevertheless, the current uptake by US ETH funds may signal a shifting tide, as these funds have attracted inflows for seven consecutive weeks.
Related: Blockstack introduces novel recovery system designed to tackle the problem of permanent crypto loss
