New Trends in the Crypto Assets Industry: From Bitcoin Mining to Ethereum Staking

The digital asset space is undergoing a significant transformation. In June 2025, Nasdaq-listed company Bit Digital announced a remarkable strategic shift: through a $150 million public offering, the company will gradually exit the Bitcoin Mining business and fully transition to Ethereum staking and fund operations. This substantial 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 bold move is not just a simple business adjustment, but a courageous strategic transformation. Bit Digital plans to gradually sell or shut down its Bitcoin Mining operations and convert its held Bitcoin assets into Ethereum. As of March 31, 2025, the company holds approximately 24,434 Ether and 418 Bitcoins, laying the foundation for its future "Ethereum purist" strategy.

This shift has triggered deep reflections within the industry regarding the development direction of the Crypto Assets sector. Bitcoin was once regarded as "digital gold," and its Mining operations were once the hottest investment direction in the digital asset field. However, as the challenges faced by the industry continue to increase, and with the maturation of the Ethereum ecosystem, Bit Digital's strategic pivot may signal a profound structural change occurring in the industry.

To deeply understand Bit Digital's decisions, it is necessary to examine the overall environment of the Crypto Assets market from 2024 to 2025. Although the price of Bitcoin broke through the 100,000 USD mark in early 2025, the Bitcoin Mining industry faced unprecedented challenges. The Bitcoin "halving" event in April 2024 directly led to a reduction in miner block rewards from 6.25 BTC to 3.125 BTC. At the same time, the mining difficulty continued to rise, with hash rates increasing, reaching 831 EH/s by May 1, 2025. Transaction fee revenue significantly dropped, with hash prices plummeting from 0.12 USD in April 2024 to about 0.049 USD in April 2025. High energy costs and the ongoing demand for equipment upgrades greatly compressed the profit margins of many mining companies. Bit Digital's Bitcoin mining revenue in the first quarter of 2025 fell by 64% year-on-year to 7.8 million USD, and the number of Bitcoins mined sharply decreased by 80% to 83.3 coins, fully reflecting the industry's predicament.

In contrast, Ethereum successfully transitioned from a Proof of Work (PoW) to a Proof of Stake (PoS) mechanism after completing "The Merge" in 2022. This shift reduced its energy consumption by 99.95%, making it a more sustainable and environmentally friendly option, which in turn attracted institutional investors seeking stable returns and lower operational costs.

Bit Digital has successfully raised $150 million by issuing 75 million ordinary shares at a price of $2 per share. The underwriters also have a 30-day over-allotment option to purchase an additional 11.25 million shares. This fundraising has significantly diluted the equity of existing shareholders: before the issuance (as of September 2024), Bit Digital had issued a total of 128.05 million shares, and the additional 75 million shares mean that the number of outstanding shares has increased by 58.5%, diluting the equity of existing shareholders by nearly 37%. It is worth noting that the proceeds from this fundraising will be "specifically used to purchase Ethereum" rather than for operational growth or debt reduction. This means that the company will be "100% exposed to Ethereum price fluctuations" after the strategic transformation, and its financial health and stock performance will be directly linked to the valuation of ETH.

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 (worth approximately 34.5 million USD) it holds as of March 31, 2025, into Ether, 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."

Bit Digital's choice to completely abandon Bitcoin mining is a rational response to the deep-seated difficulties 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 decrease of 80% year-on-year. The "high energy consumption" and "capital-intensive" characteristics of Bitcoin mining make it difficult to sustain amid market volatility and halving impacts. Mining requires continuous investment in new hardware and faces rising operational costs, while Ether staking "relies on cheaper machines and lower energy consumption," significantly reducing operational costs and environmental footprint.

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 decentralized characteristics, but at the cost of massive energy consumption, with an annual electricity usage of up to 67 to 240 terawatt-hours, and an energy cost of about 830 kilowatt-hours per transaction. This not only leads to environmental issues but also forces miners to bear high electricity costs and investments in specialized hardware.

In contrast, the PoS mechanism that Ethereum transitioned to after the "merge" exhibits astonishing energy efficiency. The PoS system eliminates energy-intensive computational demands by allowing validators to stake tokens to participate in network security and transaction verification. As a result, Ethereum's energy consumption has decreased by 99.95%, with the energy consumption per transaction being only 50 kilowatt-hours. This increase in efficiency makes it a more sustainable blockchain solution and significantly reduces operational costs, providing an attractive option for companies seeking stable returns and reduced expenses.

The emergence of Liquid Staking Derivatives (LSDs) has further enhanced the appeal of Ethereum staking. LSDs allow users to earn a derivative token representing their staked assets (such as stETH for Ethereum) while staking crypto assets. This derivative token can be freely traded or used as collateral within the decentralized finance (DeFi) ecosystem, thus maintaining liquidity while earning staking rewards. This mechanism significantly improves capital efficiency and lowers the barriers to participation in staking.

Bit Digital's strategic pivot is a microcosm of the "wind direction" shift in the Crypto Assets industry, and a brave response to market dynamics and technological evolution. The company has resolutely exited the energy-intensive, profit-squeezed Bitcoin Mining business, fully embracing Ethereum stake, and 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 dilemmas.

This case clearly reveals the trend of the crypto market moving from "wild growth" to "meticulous cultivation". In the past, computational power competition 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 Liquidity Staking Derivatives (LSDs) further unlock asset liquidity, driving the deep integration of the DeFi ecosystem and the limitless expansion of application scenarios.

Looking to the future, the crypto industry will continue to focus on the resonance of efficiency, sustainability, and compliance. Technological innovations will continue to reduce energy consumption, enhance transaction speed, and improve scalability. At the same time, as the regulatory environment becomes clearer, institutional investors' confidence in participation will further strengthen. Bit Digital's strategic transformation is a concentrated reflection 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 ever-evolving market.