Bit Digital pledged 74% of its staked Ethereum position to a loan that can trigger a 24-hour collateral call
Bit Digital funded WhiteFiber and other AI infrastructure needs without selling Ethereum or issuing new shares, but it increased dependence on a collateralized crypto borrowing structure. The company borrowed $50 million from Galaxy Digital at 5.45%, backed by 49,000 LsETH, after converting 73,235 ETH into 66,192 LsETH. It kept 17,192 LsETH as a buffer and recorded the pledged LsETH as a $105.6 million collateral receivable. A separate WhiteFiber delayed-draw facility started at $100 million and could rise to $150 million by agreement, backed by Enovum stock and a parent guaranty. Galaxy’s loan has standard margin-call rules, including potential partial liquidation if collateral is not topped up, though there was no indication Bit Digital neared a call. The quarter also included a $46 million non-cash impairment on LsETH and lower staking revenue, but no ETH sales. The structure preserved the ETH treasury and avoided dilution, while tying part of that treasury to financing risk. Bit Digital is also evaluating share buybacks.
