Bitcoin Mining Companies Turn to Ethereum: A New Trend in the Encryption Industry?

In the digital asset space, a publicly traded company recently announced a remarkable strategic shift. The company named Bit Digital has decided to accelerate its exit from Bitcoin mining through a $150 million public offering and fully transition to Ethereum staking and fund operations. This massive amount of capital will be entirely used to purchase Ether (ETH), making Bit Digital one of the companies with the largest financial commitment to ETH in the public market.

This move is not just a simple business adjustment, but rather a bold "gamble". Bit Digital plans to gradually sell or shut down its Bitcoin mining operations and convert its Bitcoin assets into Ether. As of the end of March 2025, the company holds approximately 24,434 Ethers and 418 Bitcoins, laying the foundation for its future "Ethereum Purism" strategy.

This shift has prompted reflections on whether the "wind direction" of the encryption world has already changed. Bitcoin was once regarded as "digital gold," and its mining operations were one of the hottest investment directions in the digital asset space. However, with the emergence of a series of challenges and the increasing maturity of the Ethereum ecosystem, Bit Digital's pivot may herald a deeper structural change in the industry.

To understand Bit Digital's decisions, we need to examine the macro background of the cryptocurrency market from 2024 to 2025. Although the price of Bitcoin broke through the 100,000 USD mark in early 2025, the Bitcoin mining industry faced unprecedented structural challenges. The Bitcoin "halving" event in April 2024 directly reduced the block reward for miners from 6.25 BTC to 3.125 BTC. At the same time, mining difficulty continued to rise, with hash rates increasing rather than decreasing, reaching 831 EH/s by May 1, 2025. Revenue from transaction fees plummeted, with hash prices dropping sharply from 0.12 USD in April 2024 to about 0.049 USD in April 2025. High energy costs and ongoing equipment upgrade demands have severely compressed the profit margins of many mining companies.

In stark contrast to the challenges 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 has 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: before the issuance, Bit Digital had 128.05 million shares outstanding, and the new 75 million shares mean that the number of shares in circulation has increased by 58.5%, diluting existing shareholders' equity by nearly 37%. Notably, the proceeds from this fundraising will be "specifically used to purchase Ether," rather than for operational growth or debt reduction.

Bit Digital's decision to completely abandon Bitcoin mining is a rational response to the deep-seated challenges in the industry. After the Bitcoin halving in 2024, mining profitability tightened significantly, with Bit Digital mining only 83.3 Bitcoins in the first quarter of 2025, a year-on-year decrease of 80%. The "high energy consumption" and "capital-intensive" nature of Bitcoin mining have made it unsustainable under market volatility and halving impacts. In contrast, Ethereum staking "relies on cheaper machines and lower energy consumption," significantly reducing operational costs and environmental footprint.

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 renowned for its robust security and decentralization, but it comes at the cost of enormous energy consumption. In contrast, Ethereum's PoS mechanism demonstrates remarkable energy efficiency while offering a more attractive profit model: stakers earn passive income by contributing to network security, similar to bank deposit interest.

The emergence of liquid staking derivatives ) LSDs ( further enhances the appeal of Ethereum staking. LSDs allow users to earn a derivative token representing their staked assets while staking encryption assets, which can be freely traded in the decentralized finance ) DeFi ( ecosystem or used as collateral, thus maintaining liquidity while earning staking rewards.

In the cryptocurrency space, the discussion about whether Ethereum can surpass Bitcoin by 2025 has always been a focal point. Different institutional investors and analysts hold varying views on this, reflecting differing opinions on Bitcoin as a store of value and Ethereum as a programmable platform.

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Bit Digital's strategic pivot is a microcosm of the "wind direction" shift in the cryptocurrency industry, and a brave response to market dynamics and technological evolution. This case clearly reveals the trend of the crypto market moving from "wild growth" to "meticulous cultivation." In the past, competition in computing power and the narrative of "digital gold" dominated the market. Now, with the maturity of Ethereum's PoS mechanism, the industry's focus is shifting towards capital efficiency, environmental sustainability, and predictable returns.

Looking to the future, the encryption 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 the regulatory environment gradually becomes clearer, the confidence of institutional investors will be further strengthened. The transformation of Bit Digital is not only related to the fate of a single company but will also provide valuable experiences and insights for the entire digital asset field on how to adapt, innovate, and achieve long-term success in an evolving market.