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Bit Digital Investors Flee as Firm Raises $150 M, Dumps BTC for 42K-ETH Treasury Plan - Crypto News Flash
Bit Digital stock also plummeted this week as the one-time Bitcoin miner announced a dramatic change in business strategy, including a significant public offering and a wholesale change to Ethereum. The stock of the firm has declined by almost 19% in the five-day trading session and it closed on Thursday evening at $1.99 and it had touched a low of $1.86 during the trading hours, but it recovered a bit during the after-hours trading.
Why is Bit Digital Stock Plummeting?
The sell-off began earlier in the week following a series of announcements that startled investors. On Wednesday, Bit Digital declared to become a pure Ethereum-oriented company and give up its former concentration on mining Bitcoin. The company has described its intentions of becoming a pure-play Ethereum staking and treasury, as it pledged to buy a lot of Ether.
In this strategic repositioning, Bit Digital has reported that its company would sell all its Bitcoin holdings and add more of Ethereum. The company recorded as of March 31 an inventory of 417 BTC and 24,434 ETH with respective valuations of approximately $34.5 million and $44.6 million. After the complete conversion to Bitcoin, Bit Digital projects its possession to stand at about 42,000 ETH, around a value of about $103 million at the current prices.
The swift response of investors to the news has produced an immediate effect of close to 4 percent decline to the stocks of the company on Wednesday alone. The larger meltdown came on Thursday as Bit Digital announced that it will do a public offering of 75 million ordinary shares at a price of $2 a piece with intentions to raise capital of 150 million. The money obtained in this offering will be spent on purchasing extra ETH, which will strengthen the Ethereum-focused strategy of the firm.
The two announcements, weeks apart of moving out of Bitcoin and a huge stock issues, seemed to send shock waves to the investors. Just after the news broke, shares dropped to the weekly low of $1.86, but afterwards recorded marginal increases even after closing of markets on Thursday.
Brief Overview On Bit Digital
Bit Digital, once ranked as the 12th-largest Bitcoin mining company by market capitalization, has now dropped to 13th, according to data from CompaniesMarketCap. The firm’s equity has suffered a year-to-date decline of more than 40%, highlighting the market jitters in the shifting business of the company.
For further context, Bit Digital initiated the creation of the Ethereum staking system back in 2022 and it has been amassing ETH to add to its corporate coffers. With its recent moves, the company has taken decisive steps to distance itself from Bitcoin. It signals an aggressive push into Ethereum despite major investor pullback.