Bit Digital Inc. (BTBT), a Nasdaq-listed crypto firm, saw its stock tumble this week after announcing two major moves: a $150 million public offering and a strategic shift from Bitcoin mining to Ethereum staking.

Shares of Bit Digital plunged by 15% in a single day and dropped nearly 19% over the week, closing at $1.99 on Friday, down from a recent high of $2.40. The sharp sell-off reflects investor concerns about the company’s new direction, especially during uncertain market conditions.

$150M Public Offering Sparks Sell-Off

On Thursday, Bit Digital announced it would issue 75 million ordinary shares at $2 each in a public offering aimed at raising $150 million. The company plans to use the funds to buy more Ether (ETH) and expand its staking operations, doubling down on its recent pivot toward the Ethereum ecosystem.

The announcement triggered immediate market reaction. Shares fell to $1.86 during regular trading before rebounding slightly in after-hours. The offering significantly dilutes existing shareholder value, which likely contributed to the sharp decline.

From Bitcoin Mining to Ethereum Staking

This public offering follows Bit Digital’s official exit from Bitcoin (BTC) mining, a move it announced earlier in the week. The company revealed it is now focusing entirely on becoming a “pure-play Ethereum staking and treasury company.”

Bit Digital began building its ETH staking infrastructure in 2022 and has since accumulated a significant amount of Ethereum. As of March 31, 2025, the company held:

• 24,434 ETH, worth approximately $44.6 million

• 417 BTC, valued around $34.5 million

The company plans to convert all its BTC holdings into ETH, aiming to bring its Ethereum treasury to around 42,000 ETH, which would be worth over $103 million at current prices.

Investors React to Sudden Shift

Despite the company’s long-term ambitions in Ethereum staking, investors were quick to express doubt. The stock price dropped nearly 4% on Wednesday following the ETH pivot announcement and continued to decline sharply throughout the week.

Bit Digital was once ranked as the 12th-largest Bitcoin mining company by market capitalization. Following its ETH strategy reveal, it has now slipped to 13th, according to data from CompaniesMarketCap. Its share price is also down over 40% year-to-date, adding to growing concerns from shareholders.

Analysts suggest that investor skepticism stems from:

• The abrupt change in business model, which introduces new risks

• Heavy dilution from the $150M public offering

• Uncertainty surrounding the regulatory environment for Ethereum staking

• Concerns about ETH price volatility and the profitability of staking over mining

While ETH staking offers lower energy costs and steady yields, it also exposes firms to new technical and compliance challenges.

Ethereum Strategy May Have Long-Term Upside

Despite the negative market reaction, Bit Digital remains firm in its new vision. The company believes Ethereum staking will offer greater returns and lower operational costs over time compared to Bitcoin mining.

This strategy aligns with a broader industry trend of mining firms transitioning into staking, treasury management, and DeFi infrastructure, especially as Bitcoin mining margins shrink due to increasing competition and halving events.

Additionally, Ethereum has continued to evolve since transitioning to Proof of Stake (PoS), attracting institutional interest and making staking a viable alternative for yield-focused crypto companies.

Conclusion: Short-Term Pain, Long-Term Bet on ETH

Bit Digital’s rapid pivot to Ethereum and a $150 million capital raise have shaken investor confidence, at least in the short term. The nearly 20% weekly stock drop reflects concern over dilution, uncertainty around staking, and a sharp change in business strategy.

However, if Bit Digital successfully executes its ETH-focused plan and Ethereum staking becomes a mainstream yield strategy, the move could pay off in the long run.

For now, the market is watching closely as the company transforms itself from a Bitcoin miner to a crypto staking firm with Ethereum at its core.