- Bit Digital is extending a $100M loan facility to a WhiteFiber subsidiary, expandable to $150M.
- Funding supports WhiteFiber’s growth in high-performance computing and AI infrastructure.
- Advances may be funded via Ethereum-denominated secured credit, maintaining ETH exposure.
Bit Digital is leveraging its Ethereum holdings. The Nasdaq-listed business announced a $100 million delayed-draw term loan facility for a WhiteFiber affiliate, with the option to increase the commitment to $150 million.
Accelerating AI Infrastructure via Bit Digital
Bit Digital stated on Wednesday that it is extending a $100 million delayed-draw term loan facility to a subsidiary of its majority-owned WhiteFiber.
WhiteFiber is a New York-based AI infrastructure and high-performance computing company.
The facility, which may be enlarged to $150 million with mutual consent, is intended to support WhiteFiber’s near-term high-performance computing and AI expansion efforts, according to a release.
The capital explicitly supports the buildout of advanced institutional-grade data facilities in key regions.
Hence, it is a targeted allocation of resources that helps whiteFiber scale its operations ahead of global market demand.
Besides, the structured loan offers a borrower an interest rate of 9.5% per annum.
This interest rate, however, will be reduced to 8% when certain milestones of infrastructure deployment are met.
Specifically, whiteFiber must complete Phase I of its data facility. It must also lease at least 80% of this capacity at competitive market rates.
Ethereum-Backed Credit Optimizes Treasury Yields
Bit Digital stated that advances under the facility can be funded in whole or in part by an Ethereum-denominated secured credit facility.
This structure enables the corporation to maintain ETH exposure while earning a financing spread on the loan asset.
The setup represents another step in Bit Digital’s transition away from Bitcoin mining and toward Ethereum-based treasury operations.
The company has centred its approach around ETH holdings, staking, AI infrastructure, and a majority interest in WhiteFiber.
This spread produces an ideal revenue stream without causing the taxable liquidation of main cryptocurrencies.
Prominent investment bank B. Riley Securities purchased a portion of these term loans from the primary capital subsidiary.
This institutional participation highlights strong Wall Street demand for structured digital finance instruments.
Complete Strategic Pivot Executes Treasury Shift
This is a historic step towards the complete shift from the classic proof-of-work Bitcoin mining paradigm.
Instead, Bit Digital now operates as a sophisticated strategic asset company focusing on Ethereum treasury activities.
The company’s liquid, native, and digital assets are tightly coupled with the company’s physical, cash-generating computational infrastructure.
Earlier this year, management announced plans to completely wind down its capital-intensive Bitcoin mining hardware fleet.
The executives talked of diminishing capital efficiency of the traditional mining business compared with the high-performance cloud business.
Thus, the mega-credit allocation is a tangible implementation of the corporate reorganization plan that has been previously declared.
The integration of the company’s native web3 balance sheet and whiteFiber ensures that it optimises its medium/long-term shareholder net asset value.
