Former Bitcoin mining firm Bit Digital experienced a significant stock decline this week, with its share price dropping nearly 19% over the five-day period to close at $1.99 on Friday—a 15% drop within just 24 hours.
The steep drop followed major corporate announcements. On Thursday, the company announced a public offering of 75 million ordinary shares, intended to raise $150 million. These shares are planned to be issued at $2 each, with proceeds dedicated to purchasing Ethereum (ETH), representing a doubling down on its recent decision to transition from Bitcoin.
After the news broke, Bit Digital’s stock dipped to as low as $1.86 before recovering slightly in after-hours trading.
Bit Digital pivots into an ETH staking and treasury company
This follows the company’s decision announced earlier this week to pivot from Bitcoin mining to becoming a “pure-play Ethereum staking and treasury company.” The company revealed plans to liquidate its remaining Bitcoin holdings to purchase ETH.
According to filings, Bit Digital held 417 Bitcoin (BTC) worth approximately $34.5 million as of March 31, alongside 24,434 ETH valuing around $44.6 million. Converting all BTC to ETH would increase its holdings to approximately 42,000 ETH, worth $103 million based on current prices.
Investors reacted negatively to both announcements. Following Wednesday’s ETH pivot announcement, shares fell nearly 4%. Cumulatively, the stock lost nearly 19% during the week, trading from a high of $2.40 down to a low of $1.86.
Although its stock has weakened, Bit Digital showed no signs of reversing its strategic shift from profitable Bitcoin mining towards a model focused on Ethereum staking. Its market capitalization has dropped precipitously, moving from being the 12th-largest Bitcoin miner to the 13th spot, and it has declined over 40% this year according to market data.
Related: Bitcoin mining firm Bit Digital reports revenues up nearly 40%
Additional context
CoinDesk reached out to Bit Digital for comment but had not received a response at press time.
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