Bit Digital Funds WhiteFiber's HPC Expansion with $100M Facility, Leverages ETH for $50M Galaxy Loan
BTBT sits 62% above its 52-week low of $1.25.
Summary
Bit Digital's subsidiary is lending up to $150 million to its majority-owned WhiteFiber for HPC data center expansion, funded in part by a $50 million loan from Galaxy Digital leveraging Bit Digital's Ethereum assets.
Key Events · Financing and Capital Events · BTBT
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Strategic Inter-Company Loan Originated
Bit Digital Capital, Inc., a wholly-owned subsidiary of Bit Digital, has entered into a Delayed Draw Term Loan Facility and Security Agreement to provide up to $100 million (expandable to $150 million) to Enovum NC-1 Venture, LLC, an indirect wholly-owned subsidiary of Bit Digital's majority-owned WhiteFiber.
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Funding Through Galaxy Digital Loan
To fund the inter-company loan, Bit Digital has drawn an initial $50 million from a Master Digital Currency Loan Agreement with Galaxy Digital LLC, secured by digital currency, at an interest rate of 5.45% per annum.
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Support for HPC Data Center Expansion
The facility is intended to support WhiteFiber's general corporate purposes, including the completion of a 40-megawatt high-performance computing (HPC) data center in North Carolina, aligning with Bit Digital's AI/HPC infrastructure strategy.
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Favorable Loan Terms and Governance
The loan to WhiteFiber carries an interest rate of 9.5% per annum (stepping down to 8%) and a minimum 1.1x return on invested capital (MOIC). The transaction was approved by independent committees and received fairness opinions from Needham and Company LLC and Seaport Global Securities, LLC.
Analysis · BTBT · Crypto Assets
Bit Digital, through its subsidiary, is providing a substantial $100 million (expandable to $150 million) term loan facility to Enovum NC-1 Venture, an indirect subsidiary of its majority-owned WhiteFiber. This financing is critical for WhiteFiber's high-performance computing (HPC) data center buildout, aligning with Bit Digital's strategic focus on AI/HPC infrastructure, especially following the recent $865 million colocation deal with Nscale. Bit Digital is funding an initial $50 million of this loan by borrowing from Galaxy Digital against its Ethereum holdings, aiming to generate a positive interest rate spread (9.5% received vs. 5.45% paid). While this strategy adds leverage to Bit Digital's balance sheet, particularly given its recent significant net losses, it provides essential capital for a key growth vertical and demonstrates a sophisticated treasury approach to yield generation.
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At the time of this filing, BTBT was trading at $2.02 on NASDAQ in the Crypto Assets sector, with a market capitalization of approximately $708.9M. The 52-week trading range was $1.25 to $4.55. This filing was assessed with neutral market sentiment and an importance score of 8 out of 10.