The wind has changed? Bitcoin mining companies are turning to Ethereum.

Written by: Luke, Mars Finance

Has the "wind changed" in the crypto world?

In the vast realm of digital assets, Bit Digital (BTBT), listed on Nasdaq, announced a strategic shift that caught the market's attention in June 2025: through a public offering of $150 million, the company will accelerate its exit from the Bitcoin mining business and fully transition to Ethereum staking and capital operations. This substantial fundraising will be entirely used to purchase Ethereum (ETH), making it one of the largest companies in the public market to make a financial commitment to ETH to date. This move is not just a simple business adjustment, but a bold "gamble," as Bit Digital plans to gradually sell or close its Bitcoin mining operations and convert its Bitcoin assets into Ethereum. As of March 31, 2025, Bit Digital held approximately 24,434 ETH and 418 BTC, laying the foundation for its future "Ethereum purism."

This move inevitably prompts deep reflection: has the "wind direction" of the crypto world truly changed? Bitcoin was once regarded as "digital gold," and its mining business was a hotbed for wealth in the digital asset space. However, with a series of challenges emerging and the increasing maturity of the Ethereum ecosystem, Bit Digital's pivot may signal a profound structural change in the industry.

To understand the decisions of Bit Digital, it is necessary to examine the macro context of the cryptocurrency market in 2024-2025. Despite Bitcoin's price breaking the $100,000 mark in early 2025, the Bitcoin mining industry is facing unprecedented structural challenges. The Bitcoin "halving" event in April 2024 directly reduced miners' block rewards from 6.25 BTC to 3.125 BTC. Meanwhile, mining difficulty continues to soar, and the hash rate has not decreased but increased, reaching 831 EH/s by May 1, 2025. Transaction fee revenue has significantly declined, with hash prices plummeting from $0.12 in April 2024 to approximately $0.049 in April 2025. High energy costs and ongoing equipment upgrade demands have squeezed the profit margins of many mining companies. In the first quarter of 2025, Bit Digital's Bitcoin mining revenue decreased by 64% year-on-year to $7.8 million, and the number of Bitcoins mined plummeted by 80% to 83.3 coins, reflecting the industry's difficulties.

In sharp contrast to the difficulties of Bitcoin mining, Ethereum successfully transitioned from Proof of Work (PoW) to Proof of Stake (PoS) after completing "The Merge" in 2022. This shift reduced its energy consumption by 99.95%, making it a more sustainable and environmentally friendly option, thereby attracting institutional investors seeking stable returns and lower operating costs.

Bit Digital's Strategic Shift: A $150 Million Bet

Fundraising details and Ethereum layout

Bit Digital successfully raised $150 million by issuing 75 million shares of common stock 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 caused significant dilution of equity for existing shareholders: prior to the issuance (as of September 2024), Bit Digital had 128.05 million shares outstanding, and the additional 75 million shares mean a 58.5% increase in the number of shares in circulation, diluting the equity of existing shareholders by nearly 37%. Notably, the proceeds from this fundraising will be "exclusively used to purchase Ethereum," rather than for operational growth or debt reduction. This means that the company is "100% exposed to the price fluctuations of Ethereum" after its strategic transformation, and its financial health and stock performance will be directly tied to the valuation of ETH. Such a large-scale equity dilution, along with a singular use of funds, indicates that Bit Digital's management has extremely high confidence in the future performance of Ethereum.

Bit Digital's determination to transform is also reflected in its comprehensive asset conversion plan. The company plans to gradually convert its holding of 417.6 bitcoins (worth approximately $34.5 million) as of March 31, 2025, into Ethereum, and to sell or liquidate its global Bitcoin mining operations, including facilities in the United States, Canada, and Iceland. The net proceeds will also be reinvested into ETH. This means that Bit Digital will become a "pure Ethereum staking and fund management company."

Core Financial and Asset Comparison of Bit Digital Before and After Transformation

Goodbye Bitcoin Mining: Why Choose "Decluttering"?

Bit Digital's decision to completely abandon Bitcoin mining is a rational response to the deep-seated dilemmas in the industry. After the Bitcoin halving in 2024, mining profitability has tightened significantly, with Bit Digital mining only 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 unsustainable under market fluctuations and the impact of halving. Mining requires a continuous investment in new hardware and faces rising operational costs, while Ethereum staking "relies on cheaper machines and lower energy consumption," significantly reducing operational costs and environmental footprint. For instance, the energy consumption of Ethereum's PoS system is 99.95% lower than that of PoW, with its energy consumption levels comparable to that of a small town rather than a country. Bit Digital's transformation is not only a response to financial pressure but also aligns with the macro trend in the crypto industry from "energy-consuming" PoW to "capital-efficient" PoS, aiming to achieve the dual goals of "growth and sustainability." This shift reflects the evolution of values within the crypto industry: in the past, hash power competition was core, whereas now capital efficiency and environmental sustainability have become new competitive advantages.

Ethereum Staking: A New Era of "Digital Gold Rush"?

The battle between PoW and PoS: Efficiency, Yield, and Sustainability

The core of Bit Digital's strategic transformation lies in a profound understanding of the fundamental differences between the Bitcoin Proof of Work (PoW) mechanism and the Ethereum Proof of Stake (PoS) mechanism. Bitcoin's PoW mechanism is known for its strong security and decentralization features, but at the cost of enormous energy consumption, with an annual electricity consumption of 67 to 240 terawatt-hours, and an energy cost of about 830 kilowatt-hours per transaction. This not only brings environmental issues but also forces miners to bear high electricity costs and investments in specialized hardware.

In contrast, the PoS mechanism that Ethereum switched to after the "merge" demonstrates astonishing energy efficiency. The PoS system eliminates energy-intensive computational demands by allowing validators to participate in network security and transaction validation through staking tokens. As a result, Ethereum's energy consumption has decreased by 99.95%, with the energy consumption per transaction being only 50 kilowatt-hours. This improvement in efficiency makes it a more sustainable blockchain solution and significantly lowers operational costs, providing an attractive option for companies seeking stable returns and reduced expenses. The PoS mechanism offers a more appealing profit model: stakers earn passive income by contributing to network security, similar to bank deposit interest. The annualized yield for Ethereum staking typically ranges from 4% to 7%, providing a more stable and predictable cash flow compared to the unpredictability of Bitcoin mining.

Liquidity Staking Derivatives (LSDs): Unlocking a New Paradigm of Liquidity

Traditional Proof of Stake (PoS) staking has an inherent drawback: staked tokens are usually required to be locked for a period of time, sacrificing asset liquidity. For example, running an independent Ethereum validator node requires staking at least 32 ETH, and this asset cannot be used for other investments or transactions during the staking period.

The emergence of Liquid Staking Derivatives (LSDs) provides an elegant solution. LSDs allow users to earn a derivative token that represents their staked assets (such as stETH for Ethereum) while staking their crypto assets. This derivative token can be freely traded in the decentralized finance (DeFi) ecosystem or used as collateral, thus maintaining liquidity while earning staking rewards. This mechanism significantly improves capital efficiency and lowers the barrier to entry for staking. The "Shapella" upgrade of Ethereum in April 2023 activated the withdrawal function for staked ETH, further driving a surge in demand for LSDs. LSDs address the liquidity dilemma, enhance capital efficiency, and lower the entry barriers for staking, significantly increasing the attractiveness of the Ethereum ecosystem for institutional capital.

Institutional Perspective: Can Ethereum Surpass Bitcoin?

In the cryptocurrency space, discussions about whether Ethereum can surpass Bitcoin by 2025 have been a focal point. BlackRock CEO Larry Fink has referred to Bitcoin as "digital gold," but has also emphasized the revolutionary potential of tokenization for investments, stating that "every asset can be tokenized," which opens the door for Ethereum as a programmable platform. JPMorgan analysts believe that Bitcoin's dominance may persist through 2025, attributed to inflows into spot Bitcoin ETFs and corporate purchasing plans. Meanwhile, MicroStrategy founder Michael Saylor is known for his steadfast "Bitcoin first" stance. Fidelity Digital Assets holds a positive outlook for the long-term prospects of both Bitcoin and Ethereum. These viewpoints reflect different narratives from institutions regarding crypto assets: Bitcoin as a store of value, and Ethereum as the core of a programmable platform and innovative ecosystem.

Conclusion: The Deep Insights of the "Wind Direction" in the Cryptocurrency Industry

Bit Digital's strategic shift is a microcosm of the change in the "winds" of the cryptocurrency industry, and a brave response to market dynamics and technological evolution. The company has decisively exited the energy-intensive and profit-squeezed Bitcoin mining business, fully embracing Ethereum staking, 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 cryptocurrency market moving from "wild growth" to "meticulous cultivation." In the past, competition in computing power and the narrative of "digital gold" dominated the market. However, now, with the maturation of Ethereum's PoS mechanism, the industry's focus is shifting towards capital efficiency, environmental sustainability, and predictable returns. Financial innovations like liquid staking derivatives (LSDs) further unlock asset liquidity, promoting the deep integration of the DeFi ecosystem and the limitless expansion of application scenarios. This indicates that the cryptocurrency industry is transcending mere speculative attributes, developing towards greater practical value, more refined financial engineering, and broader application fields.

Looking to the future, the cryptocurrency 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 regulatory agencies like the SEC gradually clarify staking and other businesses, the confidence of institutional investors will further strengthen. Bit Digital's bold bet is a concentrated reflection of these macro forces at a micro level. Its success or failure is not only related to the fate of a single company but will also provide valuable experiences and insights on how the entire digital asset sector can adapt, innovate, and achieve long-term success in an evolving market. Has the "wind direction" of the crypto world really changed? Bit Digital's actions have undoubtedly cast a heavy stone, creating ripples that deserve our ongoing attention and deep reflection.