New Trends in the Crypto Assets Industry: Bitcoin Mining Companies Shift to Ether

In the digital assets space, a remarkable strategic shift is unfolding. Nasdaq-listed company Bit Digital announced a significant decision in June 2025: to accelerate its exit from Bitcoin mining operations through a $150 million public offering and fully transition to Ethereum staking and fund operations. This massive capital will be entirely used to purchase Ether (ETH), making Bit Digital one of the companies with the largest financial commitment to ETH in the public market.

This move is not just a simple business adjustment, but a courageous major bet. Bit Digital plans to gradually sell or shut down its Bitcoin mining business and convert its held Bitcoin assets into Ether. As of March 31, 2025, the company holds approximately 24,434 Ether and 418 Bitcoin, laying the foundation for its future "Ethereum purism" strategy.

This shift has sparked deep reflections within the industry regarding the development direction of the Crypto Assets sector. Bitcoin was once regarded as "digital gold," and its mining business was once the hottest profitable avenue in the digital asset field. However, with the emergence of a series of challenges and the increasing maturity of the Ethereum ecosystem, Bit Digital's transformation may indicate a profound structural change in the industry.

To understand Bit Digital's decisions, one must examine the macro environment of the crypto assets market for 2024-2025. Although the price of Bitcoin is expected to break the $100,000 mark in early 2025, the Bitcoin mining industry is facing unprecedented structural challenges. The Bitcoin "halving" event in April 2024 directly reduces miners' block rewards from 6.25 BTC to 3.125 BTC. At the same time, mining difficulty continues to rise, and the hash rate has increased, reaching 831 EH/s by May 1, 2025. Transaction fee revenue has significantly decreased, with hash prices plummeting from $0.12 in April 2024 to about $0.049 in April 2025. High energy costs and ongoing equipment upgrade demands have severely compressed the profit margins of many mining companies. Bit Digital's Bitcoin mining revenue in the first quarter of 2025 decreased by 64% year-on-year to $7.8 million, with the number of Bitcoins mined sharply declining by 80% to 83.3 coins, reflecting the industry's predicament.

In stark contrast to the difficulties of Bitcoin mining, Ethereum successfully transitioned from Proof of Work (PoW) to Proof of Stake (PoS) after completing "The Merge" in 2022. This shift reduced its energy consumption by 99.95%, making it a more sustainable and environmentally friendly option, thus attracting institutional investors seeking stable returns and lower operating costs.

Bit Digital's Strategic Shift: A $150 Million Bet

Fundraising details and Ethereum layout

Bit Digital has successfully raised $150 million by issuing 75 million shares of common stock at a price of $2 per share. The underwriters also have a 30-day overallotment option to purchase an additional 11.25 million shares. This fundraising has significantly diluted the equity of existing shareholders: prior to the issuance (as of September 2024), Bit Digital had 128.05 million shares outstanding, and the addition of 75 million shares means that the float has increased by 58.5%, resulting in nearly a 37% dilution of existing shareholders' equity. Notably, the proceeds from this fundraising will be "specifically used to purchase Ethereum," rather than for operational growth or debt reduction. This leaves the company "fully exposed to Ethereum price fluctuations" following its strategic transformation, and its financial health and stock performance will be directly linked to the valuation of ETH. Such a large-scale equity dilution, along with a singular use of funds, indicates that Bit Digital's management has extremely high confidence in Ethereum's future performance.

Bit Digital's determination to transform is also reflected in its comprehensive asset conversion plan. The company plans to gradually convert the 417.6 Bitcoins (valued at approximately $34.5 million) it holds as of March 31, 2025, into Ethereum, and to sell or liquidate its global Bitcoin mining operations, including facilities in the United States, Canada, and Iceland, with the net proceeds being reinvested into ETH. This means that Bit Digital will transform into a "pure Ethereum staking and fund management company."

Farewell to Bitcoin Mining: An In-Depth Analysis of the Reasons

Bit Digital's decision to completely abandon Bitcoin mining is a rational response to the deep-seated challenges in the industry. After the Bitcoin halving in 2024, mining profitability has significantly tightened, with Bit Digital only mining 83.3 Bitcoins in the first quarter of 2025, a year-on-year decline of 80%. The "high energy consumption" and "capital-intensive" characteristics of Bitcoin mining make it unsustainable amid market volatility and halving impacts. Mining requires continuous investment in new hardware and faces rising operational costs, whereas Ethereum staking "relies on cheaper machines and lower energy consumption," thereby significantly reducing operational costs and environmental footprint. For instance, the energy consumption of the Ethereum PoS system is reduced by 99.95% compared to PoW, with its energy consumption levels comparable to a small town rather than a country. Bit Digital's transformation is not only a response to financial pressure but also aligns with the macro trend in the crypto industry from "energy-consuming" PoW to "capital-efficient" PoS, aiming to achieve the dual goals of "growth and sustainability." This shift reflects the evolution of values within the crypto industry: the past focus on computing power competition has now shifted to capital efficiency and environmental sustainability as new competitive advantages.

Ethereum Staking: A New Era of "Digital Gold Rush"?

The Battle Between PoW and PoS: Efficiency, Profitability, and Sustainability

The core of Bit Digital's strategic transformation lies in a profound understanding of the fundamental differences between Bitcoin's Proof of Work (PoW) mechanism and Ethereum's Proof of Stake (PoS) mechanism. Bitcoin's PoW mechanism is renowned for its strong security and decentralization characteristics, but the cost is enormous energy consumption, with annual electricity consumption reaching 67 to 240 terawatt-hours and an energy consumption of about 830 kilowatt-hours per transaction. This not only brings environmental issues but also forces miners to bear high electricity costs and specialized hardware investments.

In contrast, the PoS mechanism that Ethereum has adopted after the "merge" demonstrates remarkable energy efficiency. The PoS system eliminates energy-intensive computing requirements by allowing validators to participate in network security and transaction verification through staking tokens. As a result, Ethereum's energy consumption has decreased by 99.95%, with the energy consumption per transaction being only 50 kilowatt-hours. This efficiency improvement makes it a more sustainable blockchain solution and significantly lowers operational costs, providing an attractive option for companies seeking stable returns and reduced expenses. The PoS mechanism offers a more appealing profit model: stakers earn passive income by contributing to network security, similar to bank deposit interest. Ethereum staking typically yields an annualized return of 4% to 7%, providing a more stable and predictable cash flow compared to the unpredictability of Bitcoin mining.

Liquidity Staking Derivatives (LSDs): Unlocking a New Paradigm of Liquidity

Traditional Proof of Stake (PoS) staking has an inherent drawback: the staked tokens usually need to be locked for a period of time, sacrificing asset liquidity. For example, running an Ethereum independent validator node requires staking at least 32 ETH, which means this asset cannot be used for other investments or transactions during the staking period.

The emergence of Liquid Staking Derivatives (LSDs) provides an elegant solution. LSDs allow users to obtain a derivative token representing their staked assets (such as stETH for Ethereum) while staking crypto assets. This derivative token can be freely traded in the decentralized finance (DeFi) ecosystem or used as collateral, thereby maintaining liquidity of funds while earning staking rewards. This mechanism significantly improves capital efficiency and lowers the barrier to participation in staking. The "Shapella" upgrade of Ethereum in April 2023 activated the withdrawal function for staked ETH, further driving the surge in demand for LSDs. LSDs address the liquidity conundrum, enhance capital efficiency, and lower the entry barriers for staking, significantly increasing the appeal of the Ethereum ecosystem to institutional capital.

Institutional Perspective: The Future of Ethereum and Bitcoin

In the field of Crypto Assets, the discussion about whether Ethereum can surpass Bitcoin by 2025 has been a focus. Some executives from financial institutions view Bitcoin as "digital gold" but also emphasize the revolutionary potential of tokenization for investment, believing that "every asset can be tokenized," which opens the door for Ethereum as a programmable platform. Some analysts believe that Bitcoin's dominance may continue through 2025, attributed to inflows into spot Bitcoin ETFs and corporate purchasing plans. Meanwhile, some tech company executives maintain a "Bitcoin first" stance. Some asset management companies hold a positive outlook on the long-term prospects of both Bitcoin and Ethereum. These viewpoints reflect different narratives among institutions regarding Crypto Assets: Bitcoin as a store of value, and Ethereum as the core of a programmable platform and innovative ecosystem.

Conclusion: The In-Depth Insights of the "Wind Direction" in the Crypto Industry

Bit Digital's strategic shift is a microcosm of the "wind direction" change in the Crypto Assets industry and a brave response to market dynamics and technological evolution. The company resolutely exited the energy-intensive, profit-squeezed Bitcoin mining business and fully embraced Ethereum staking, while actively expanding into high-performance computing and AI services. This is not only its own survival strategy but also provides an important industry demonstration effect for other digital asset companies facing similar predicaments.

This case clearly reveals the trend of the crypto market moving from "wild growth" to "meticulous cultivation". In the past, competition in computing power and the narrative of "digital gold" dominated the market. Now, with the maturity of Ethereum's PoS mechanism, the industry's focus is shifting towards capital efficiency, environmental sustainability, and predictable returns. Financial innovations such as Liquid Staking Derivatives (LSDs) further unlock asset liquidity, promoting the deep integration of the DeFi ecosystem and the limitless expansion of application scenarios. This indicates that the crypto industry is transcending pure speculation, evolving towards more practical value, more refined financial engineering, and broader application fields.

Looking ahead, the crypto industry will continue to focus on the resonance of efficiency, sustainability, and compliance. Technological innovation will continue to reduce energy consumption, enhance transaction speed, and improve scalability. At the same time, as regulatory agencies gradually clarify businesses like staking, institutional investors' confidence in participation will further strengthen. Bit Digital's gamble is a concentrated manifestation of these macro forces at the micro level. Its success or failure not only concerns the fate of a single company but will also provide valuable experience and insights for the entire digital asset field on how to adapt, innovate, and achieve long-term success in an evolving market. Has the "wind direction" of the crypto world really changed? Bit Digital's actions have undoubtedly cast a heavy stone, creating ripples that are worth our continued attention and in-depth reflection.