Bit Digital Inc

Key Reasons for Speculative Buy

Revenue Dynamics and Segmental Performance: In the first quarter of 2025, Bit Digital, Inc. reported total revenue of USD 25.1 million, reflecting a 17% year-over-year decline. This reduction was primarily attributable to a substantial 64% drop in Bitcoin mining revenue, following the April 2024 halving event and a rise in network difficulty. However, the decline was partially mitigated by an 84% year-over-year increase in cloud services revenue and the introduction of USD 1.6 million in revenue from colocation services, which had no contribution in the prior year.

Shift in Revenue Composition: Digital asset mining, once a dominant revenue stream, accounted for just 31% of total revenue in Q1 2025, a sharp decline from 72% in the corresponding quarter of 2024. Conversely, cloud services contributed the majority of revenue at USD 14.8 million, while Ethereum staking generated USD 0.6 million, marking a 72% increase. This shift underscores the company’s successful efforts to rebalance its revenue streams away from the cyclical and volatile nature of digital asset mining.

Liquidity Position and Financial Metrics: As of March 31, 2025, Bit Digital held cash, cash equivalents, and restricted cash of USD 61.3 million, with total liquidity, including USDC and digital assets, reaching approximately USD 141.4 million. Despite this strong liquidity, the company reported a significant decline in profitability. Adjusted EBITDA for the quarter was USD (44.5) million, reversing from USD 58.5 million in Q1 2024. This decline included USD 49.2 million in mark-to-market losses on digital assets, compared to USD 45.7 million in gains the previous year. The company also recorded a GAAP loss per share of USD (0.32), in contrast to USD 0.43 earnings per share in Q1 2024.

Operational Developments and Mining Fleet Reconfiguration: The company mined 83.3 bitcoins during the quarter, representing an 80% year-over-year reduction. This was driven by both external factors (halving and network difficulty) and internal restructuring, including the redeployment of miners and reduced operational hash rate following the exit from Coinmint facilities. Bit Digital operated 20,854 miners as of quarter-end, with a maximum hash rate of 2.4 EH/s and an active hash rate of 1.5 EH/s. Meanwhile, the company expanded its ETH staking activities with 21,568 ETH actively staked.

Expansion of Cloud Infrastructure and Strategic Partnerships: Bit Digital made notable strides in its infrastructure and service expansion through its rebranded high-performance computing (HPC) business, WhiteFiber, Inc. New contracts were signed with DNA Fund and Boosteroid, contributing to approximately USD 20.9 million and USD 2.1 million in annualized revenue, respectively. The quarter also saw the initial deployment of B200 GPUs and the integration with Shadeform, allowing global cloud access across more than 100 regions. These initiatives are part of a broader strategic pivot towards AI infrastructure and diversified revenue generation.

Growth in Colocation Services and Data Center Development: Colocation services contributed positively, with a full-quarter revenue contribution after the Enovum acquisition. A new five-year, 5MW colocation agreement with Cerebras Systems was secured, supported by the upcoming development of the MTL-3 data center in Québec, estimated to cost approximately USD 40 million USD. The facility is being developed under a lease-to-own arrangement, and operations are expected to commence in July 2025. This expansion is aimed at meeting increasing demand from AI-centric clients and enhancing the company’s HPC footprint.

Strategic Direction and Forward Outlook: Despite industry headwinds in digital asset mining, Bit Digital is actively repositioning itself through disciplined capital allocation, infrastructure scaling, and diversified service offerings. The company ended the quarter with no debt and substantial liquidity, providing financial flexibility to pursue high-return opportunities. Management emphasized that while mining remains a component of the business, its relative contribution is expected to continue declining in favor of more scalable and resilient revenue streams such as cloud and colocation services.

Technical Commentary: BTBT’s stock price is currently near a crucial support zone after a minor correction, indicating a potential for a short-term upward move. The 14-period RSI is below the midpoint but shows increasing buying momentum, suggesting a possible rally to the upside. Furthermore, the stock is trading close to the 50-period Simple Moving Average, which may serve as a short-term support level. Overall, these technical indicators point to the likelihood of further gains, as long as the price remains above these important support areas.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given to Bit Digital, Inc. (NASDAQ: BTBT) at its current market price of USD 2.85 as of Aug 4, 2025 (7:45 am PDT).