NEW
YORK, March 22, 2023 /PRNewswire/ -- Bit
Digital, Inc. (Nasdaq: BTBT) ("Bit Digital" or the "Company"), a
digital asset mining company headquartered in New York, today announced a strategic
realignment of its executive leadership team. The move is expected
to best position leadership roles with respect to the Company's
current business prospects and growth objectives. The Company
additionally announced its Advisory Board and outlined strategic
priorities for 2023.
Leadership Realignment
Effective March 31, 2023,
Bryan Bullett, the Company's Chief
Executive Officer, will conclude his term as CEO. Mr. Bullett will
assume the role Senior Advisor, in which he will lead strategic
growth initiatives for the Company. Sam Tabar, the Company's Chief Strategy Officer,
will be appointed CEO.
Mr. Bullett commented, "As Senior Advisor, I look forward to
focusing my efforts on strategic initiatives to further Bit
Digital's expansion into additional, non-correlated income streams,
as well as help facilitate the transition. In my past two years as
CEO, the Company underwent profound positive shifts – exiting
China in 2021; establishing an
institutional U.S. platform; achieving 85% carbon-free energy;
entering Ethereum staking; and along the way,
demonstrating thought leadership and sound capital stewardship. I'm
pleased to be passing onto Sam a pristine balance sheet, an
innovative and growing treasury management portfolio, and most
exciting, an expanding business model that, with ETH
staking, we believe presents synergistic catalysts beyond
traditional mining. Bit Digital is positioned to thrive as we move
through and out of crypto winter, and I look forward
to continuing working with Sam and the executive team."
Mr. Tabar stated, "I'd like to express our gratitude to
Bryan Bullett for his leadership and
his contributions that have laid a strong foundation to build upon.
As incoming CEO, I look forward to continuing to work together in
his new capacity as Senior Advisor.
Going forward, Bit Digital will focus heavily on delivering
maximum shareholder value. We will do this by differentiating
ourselves from peers by aggressively pursuing new lines of
business. What already differentiates us is our pristine balance
sheet, unleveraged and sound mining business, and exciting new
Ethereum business that positions us to become a proxy
for the foundational blockchain of the 'smart contract economy'.
There is much more to come, and I am deeply excited for Bit
Digital's future."
Strategic Priorities For 2023
The Company additionally announced a non-comprehensive list of
strategic priorities for 2023. These priorities represent key focal
points for the Company which Management refers to by the acronym
"BETSS":
B - Balance Sheet
E - Expand into PoS
T - Treasury Management
S - Strategic Capital
Deployment
S - Sustainability
Such priorities are subject to change based on market conditions
and other factors, and are not necessarily presented based on
priority ranking.
- Maintain a best-in-class balance sheet
The Company finished 2022 with $32.7
million in cash, $27.7 million
of digital assets, zero debt, no miner purchase obligations, and no
material capex commitments. These figures demonstrate Management's
conservative balance sheet approach and commitment to prudent
capital allocation – factors which enabled the Company to withstand
the macro headwinds of 2022. An undrawn $500
million at-the-market facility and circa 9 million shares on
an equity line of credit provide market access as further backup
sources of liquidity, and the optionality to fund growth.
Management intends to continue its prudent approach to the balance
sheet through 2023 and beyond.
- Strategically deploy capital
While well capitalized to pursue opportunistic growth through cycle
lows, such growth will be considered only to the extent it does not
jeopardize balance sheet health. With that guiding principle, the
Company believes it has identified sound opportunities to safely
allocate capital to create long-term value, including the
following:
- Opportunistic credit investments. The Company believes
that current conditions favor providers of debt capital to the
mining sector – to such an extent, that financial investments are
in some cases more attractive than hardware investments. Many
incumbent lenders have exited or filed bankruptcy, resulting in a
severely constrained credit supply. Underwriting and structures are
evolving to provide greater margins of safety both to lenders and
borrowers. Bit Digital has reviewed several opportunities to act as
secured lender to mining-related businesses, and views this as a
viable opportunity, with an elevated risk-adjusted rate of return
and the opportunity to utilize secure structures. The Company
intends to continue evaluating and opportunistically deploy capital
in the form of debt and/or alternative credit products in
mining-related opportunities, with an emphasis on secured lending
against hard asset collateral, including via strategic
relationships with third parties.
- Prudent miner fleet growth. While the secondary ASIC
market remains depressed and oversupplied, with leveraged and
distressed owners forced to liquidate, Bit Digital has thus far
taken a careful approach to miner procurement through the down
cycle. We believe that any new purchases must be underwritten
cautiously and priced to withstand the bitcoin
halving. A key component of this is pairing purchases with stable
and economical hosting. Pending these and other variables, the
Company targets doubling its operating fleet, to approximately 2.6
EH/s, during 2023.
- Expand into PoS
In 2022, Bit Digital announced its intention to become a validator
on the Ethereum network, and to accumulate and stake
Ether (ETH). As of
December 31, 2022, the Company held
10,820 ETH and ETH equivalents with a
fair value of approximately $12.9
million, primarily acquired through programmatic conversions
of BTC mining rewards. Approximately 2,164 ETH was
actively staked, both in native and liquid protocols. The staked
portfolio is currently generating an approximate 6% APY.
Bit Digital's ongoing strategy is to mine BTC, programmatically
convert a portion to ETH, and subsequently stake to
generate rewards that can then in turn compound or be redeployed
into mining investments and other corporate uses. The Company
targets staking approximately half its total digital asset
position.
Beyond this, Bit Digital is exploring incubating additional PoS
related businesses, including a joint venture in Singapore to provide ETH
staking-related technology tools. At this time, the Company has no
plans to offer such solutions to U.S. individual residents, nor to
engage in any custodial activities such as "staking as a service"
or "earn" programs, nor to offer any staking-related tokens or
securities. In the future, Bit Digital may consider expanding its
efforts into other leading PoS protocols.
- Enhance treasury management solutions
During Q1 2023, the Company completed a $2
million strategic investment into Auros Global Limited, a
leading algorithmic trading and market making firm focused on
digital assets. In July 2022, the
Company committed $2 million to the
Nine Blocks Master Fund, a digital assets market neutral fund using
basis trading, relative value, and special situations strategies,
managed by Nine Blocks Capital Management, an institutional grade
digital assets manager.
Management believes that by leveraging and growing its strategic
relationships with partners including Auros, Nine Blocks and
potentially others, it stands to activate safely structured
solutions that may enhance yield on treasury assets and provide
downside protection.
- Continue focus on sustainability
ETH has also helped advance the Company's
sustainability goals, given that Ethereum's transition
to a proof-of-stake consensus mechanism reduced the network's
energy consumption by over 99%. On the PoW side, approximately 85%
of our bitcoin mining fleet's run-rate electricity
consumption was generated from carbon-free energy sources as of
December 31, 2022, based on data
provided by our hosts, publicly available sources, and internal
estimates. This represents marked progress from the 67% achieved as
of December 31, 2021. The Company
continues to believe that the digital assets industry's long-term
success is contingent on sustainable business practices and the
prioritization of green energy for growth initiatives. Bit Digital
remains focused on its goal of becoming entirely carbon-free.
Advisory Board
Additionally, the Company announced its reconstituted Advisory
Board, which will comprise Mr. Bullett, Henri Arslanian and Charles d'Haussy. Each
brings extensive experience, specialized expertise, and
relationships to benefit the Company. Bios of Messrs. Arslanian and
d'Haussy follow.
Henri Arslanian,
Co-Founder and Managing Director, Nine Blocks Capital Management;
former Partner, PwC
Henri Arslanian
is the co-founder and managing partner of Nine Blocks Capital
Management, an institutionally focused crypto hedge
fund. Henri is the former PwC Crypto Leader and
Partner, the former Chairman of the FinTech Association of
Hong Kong and an Adjunct Professor
at the University of Hong Kong. A
lawyer and banker by background, Henri has advised many of the
world's leading crypto exchanges, investors, financial
institutions and tech firms on their crypto
initiatives as well numerous governments, regulators and central
banks on crypto regulatory and policy matters. Henri
also sat on the Hong Kong
regulator's SFC FinTech Advisory Board, the Hong Kong's central bank's HKIMR Council of
Advisers and Dubai's DIFC
Innovation Council. With over 500,000 LinkedIn followers and 50,000
newsletter subscribers, Henri is a TEDx and global keynote speaker
and is regularly featured in global media including Bloomberg,
CNBC, CNN, BBC, The Wall Street Journal, The Economist and the
Financial Times. Henri is the host of the Crypto
Capsules educational social media series and the author of many
best-selling books including "The Book of Crypto"
(Palgrave, 2022) and "The Future of Finance" (Palgrave, 2019).
Charles d'Haussy, CEO, dYdX Foundation; former
Managing Director, ConsenSys
Charles d'Haussy is the CEO of dYdX Foundation,
an independent not-for-profit foundation headquartered in Zug,
Switzerland supporting the
dYdX protocol ecosystem. Mr. d'Haussy was formerly Global Head of
Business Development at ConsenSys, a leading blockchain engineering
company. Among his responsibilities, he led ConsenSys' projects on
central-bank digital currencies with HKMA, BOT, PBOC, CBUAE &
BOK. Prior to this, Charles served as head of fintech with the
Hong Kong government (InvestHK).
In that capacity he helped found and scale Hong Kong Fintech Week,
and supported the growth of over 450 fintech companies. He has 15
years of prior experience in Hong
Kong's private sector and is licensed to invest and deal in
securities. In 2018, Charles was elected as a Top-50 fintech
influencer in Asia. In 2021 he
published Block Kong, a book about Blockchain leaders shaping the
Hong Kong blockchain ecosystem. He
studied in France at Rennes
International Business School and in Guangzhou, China at Sun Yat Sen University. He
is a certified Bitcoin professional and studied
blockchain business strategy at Be9 London.
About Bit Digital
Bit Digital, Inc. is a digital asset mining company
headquartered in New York City.
Our mining operations are located in North America. For additional information,
please contact ir@bit-digital.com or visit our website
at www.bit-digital.com.
Investor Notice
Investing in our securities involves a high degree of risk.
Before making an investment decision, you should carefully consider
the risks, uncertainties and forward-looking statements described
under "Risk Factors" in Item 3.D of our most recent Annual Report
on Form 20-F for the fiscal year ended December 31, 2021. If any material risk was to
occur, our business, financial condition or results of operations
would likely suffer. In that event, the value of our securities
could decline and you could lose part or all of your investment.
The risks and uncertainties we describe are not the only ones
facing us. Additional risks not presently known to us or that we
currently deem immaterial may also impair our business operations.
In addition, our past financial performance may not be a reliable
indicator of future performance, and historical trends should not
be used to anticipate results in the future. Future changes in the
network-wide mining difficulty rate or bitcoin hash
rate may also materially affect the future performance of Bit
Digital's production of bitcoin. Actual operating
results will vary depending on many factors including network
difficulty rate, total hash rate of the network, the operations of
our facilities, the status of our miners, and other factors. See
"Safe Harbor Statement" below.
Safe Harbor Statement
This press release may contain certain "forward-looking
statements" relating to the business of Bit Digital, Inc., and its
subsidiary companies. All statements, other than statements of
historical fact included herein are "forward-looking statements."
These forward-looking statements are often identified by the use of
forward-looking terminology such as "believes," "expects," or
similar expressions, involving known and unknown risks and
uncertainties. Although the Company believes that the expectations
reflected in these forward-looking statements are reasonable, they
do involve assumptions, risks and uncertainties, and these
expectations may prove to be incorrect. Investors should not place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. The Company's actual
results could differ materially from those anticipated in these
forward-looking statements as a result of a variety of factors,
including those discussed in the Company's periodic reports that
are filed with the Securities and Exchange Commission and available
on its website at http://www.sec.gov. All forward-looking
statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by these factors.
Other than as required under the securities laws, the Company does
not assume a duty to update these forward-looking statements.
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SOURCE Bit Digital, Inc.