Bit Digital, Inc. (BTBT) is making a bet on Ethereum, and it's not subtle about it. The company's third-quarter earnings reveal a business in the middle of a transformation—one where Bitcoin mining takes a back seat and building a massive, yield-generating ETH treasury moves to center stage.
The numbers tell the story. Ethereum staking rewards jumped to $2.9 million in the third quarter, up sharply from just $400,000 the quarter before. That surge came as Bit Digital's ETH holdings swelled to around 122,127 ETH during the period. By late October, that treasury had grown even further to approximately 153,547 ETH, worth roughly $486 million at the time.
H.C. Wainwright analyst Kevin Dede is sticking with his Buy rating and $7 price target on Bit Digital, pointing to the third-quarter results as further validation of his bullish thesis. He notes that the company's roughly 70% stake in WhiteFiber Inc. (WYFI) continues to bolster consolidated performance, with total revenue reaching $30.5 million in the quarter.
Staking Yields and Treasury Math
Dede estimates that Bit Digital's average quarterly ETH holdings of around 76,425 ETH imply roughly a 1% yield, though management cited something closer to 3% on its earnings call. The company hasn't committed to running its own validator nodes yet, but Dede thinks that operational shift could boost returns by about 100 basis points if it happens.
Here's where the valuation argument gets interesting. Bit Digital's market cap sits at approximately $775 million. Dede argues that figure undervalues what the company actually owns: an ETH treasury worth around $486 million plus its WhiteFiber stake valued at roughly $483 million. That's nearly $970 million in combined assets backing a $775 million market cap.
Bitcoin Mining Fades Into the Background
While Ethereum takes the spotlight, Bitcoin mining is heading in the opposite direction. Dede forecasts the company's mining fleet capacity will decline from about 1.9 EH/s currently to roughly 1.2 EH/s by mid-2026. That's driving his expectation for lower Bitcoin mining revenue next year as the company clearly prioritizes its ETH strategy.
On the flip side, Dede is raising his revenue estimates for WhiteFiber. He now projects $252.1 million for fiscal 2026, up from his prior $208.0 million estimate, and $112.6 million for fiscal 2025. Those figures flow through to Bit Digital's consolidated outlook given its majority stake.
The Investment Case and Risks
Dede's thesis centers on three pillars: Bit Digital's expanding Ethereum treasury strategy, WhiteFiber's positioning in the high-performance computing and AI space, and financial flexibility supported by approximately $135 million in unsecured convertible debt. In his model, he conservatively assumes staking rewards get reinvested into validator nodes under a flat ETH price scenario.
Of course, there are risks. Crypto market volatility is the obvious one—if Ethereum's price tanks, so does the value of that massive treasury. Dede also flags potential dilution concerns, competitive pressure in the mining business, and governance issues as factors investors should watch.
Price Action: BTBT shares were down 5.19% to $2.285 in Monday trading.
