Bit Digital is making a pivotal move by allocating significant resources from its Ethereum portfolio to accelerate the growth of its subsidiary, WhiteFiber. The Nasdaq-listed firm has established a delayed-draw loan facility worth $100 million to a WhiteFiber affiliate, with the possibility of increasing this limit to $150 million if agreed upon by both parties.
Major investment in WhiteFiber’s AI infrastructure
Based in New York, WhiteFiber has emerged as a technology company specializing in high-performance computing systems and artificial intelligence infrastructure. The newly secured credit line from Bit Digital directly supports WhiteFiber’s aim to ramp up its AI and high-performance computing capabilities over the coming period. The company plans to launch enterprise-grade data centers in key regions of the United States to meet growing global demand.
The annual interest rate on the credit line is set at 9.5%. However, if WhiteFiber completes the first phase of its data center projects and successfully leases at least 80% of this capacity under favorable market conditions, the rate will decrease to 8%.
Bit Digital announced that this move is designed to help WhiteFiber scale up its operations ahead of rising global demands.
Mini glossary: A delayed-draw term loan is a type of credit facility that allows the borrower to draw approved funds incrementally over time, subject to certain conditions, rather than in a single lump sum.
Innovative structure with Ethereum-backed financing
Bit Digital has revealed that loan repayments can be financed partly or entirely through a special Ethereum-backed facility. This model lets the company retain its ETH holdings while extending credit and earning additional yield. The structure enables Bit Digital to generate revenue from digital assets without selling them, thereby minimizing potential tax liabilities.
The company’s strategy signals a shift away from Bitcoin mining in favor of actively leveraging its expanded Ethereum treasury. Recently, Bit Digital has boosted its ETH reserves while also increasing its controlling stake in WhiteFiber to enhance its strategic position.
Mini glossary: WhiteFiber is a high-performance computing and AI infrastructure provider in which Bit Digital holds a majority stake.
With this structure, Bit Digital achieves interest income from loans while retaining its ETH assets, avoiding asset sales and preserving growth on its balance sheet. Additionally, U.S. investment bank B. Riley Securities has taken an active role in this credit round, acquiring a portion of the facility. This broadens the bridge between traditional financial institutions and capital tools based on digital finance.
| Creditor | Loan Amount | Interest Rate | Collateral | Borrower | Purpose |
|---|---|---|---|---|---|
| Bit Digital | $100 million (up to $150 million with option) | Initially 9.5%, reduced to 8% if conditions met | Ethereum (ETH) | WhiteFiber | High-performance computing and AI infrastructure |
Bit Digital completes its strategic pivot from Bitcoin mining
Bit Digital has transitioned away from its traditional Bitcoin mining model toward a new strategic direction. Earlier this year, company leaders decided to disengage from most of their bitcoin mining assets, reallocating capital into cloud-based, high-performance computing initiatives.
The newly formed credit agreement stands as the most concrete step within Bit Digital’s restructuring efforts. By managing its digital assets and physical infrastructure together, the company seeks to maximize net asset value for shareholders over the medium and long term.
This move marks a significant example in testing the sustainability of a revenue model centered on crypto assets within Bit Digital’s financial strategy.
