Ethereum News Today: Bit Digital's $135M Ethereum Bet Faces Dilution Dilemma

Bit Digital, Inc. (Nasdaq: BTBT) announced the pricing of its upsized $135 million convertible senior notes offering, a 35% increase from its initially proposed $100 million raise, to fund Ethereum (ETH) acquisitions and general corporate purposes. The offering, which includes a 30-day option for underwriters to purchase an additional $15 million in notes, is set to close on October 2, 2025. The notes carry a 4.00% annual interest rate, mature on October 1, 2030, and feature a conversion rate of 240.3846 shares per $1,000 principal, equivalent to a 30% premium over the company's last reported stock price of $3.20. Net proceeds are estimated at $128.9 million (or $143.3 million if the over-allotment is exercised), with funds allocated primarily to ETH purchases and secondary uses such as investments or acquisitions in digital assets. Barclays, Cantor, and B. Riley Securities serve as joint lead managers Bit Digital Announces Pricing of Upsized $135 Million Convertible Notes Offering^[1].

The offering reflects Bit Digital's strategic shift to Ethereum-focused treasury and staking operations. Since 2022, the company has built one of the largest institutional Ethereum staking infrastructures, leveraging advanced validator operations and institutional-grade custody. The firm currently holds 121,252 ETH, acquired at an average cost of $2,635, and plans to expand its holdings with the new capital. The move aligns with broader industry trends, as companies like Coinbase and BitMine Immersion have similarly increased Ethereum treasuries, with BitMine now holding 2.65 million ETH Bit Digital $100M ETH Treasury Strategy Shakes Market^[2].

Market reactions to the offering were mixed. Following the announcement, Bit Digital's shares fell 8% in after-hours trading, settling at $2.92, amid investor concerns over dilution risks from the conversion terms. The conversion premium and potential share issuance could weigh on equity value if Ethereum prices fluctuate significantly. However, analysts note that the offering's structure-combining debt financing with conversion flexibility-may mitigate immediate liquidity pressures while allowing the company to capitalize on Ethereum's long-term growth potential Bit Digital Shares Slide 8% on $135M Upsized Convertible Note^[3].

The notes' terms include semiannual interest payments and a maturity date of October 2030, with holders able to convert their positions into cash, shares, or a combination. The company emphasized that the offering was conducted under an effective shelf registration statement, ensuring compliance with SEC regulations. Proceeds will be managed through strategic partnerships across the Ethereum ecosystem, focusing on yield optimization and protocol governance Bit Digital Announces Proposed Offering of $100 Million Convertible Notes^[4].

Bit Digital's strategy highlights growing institutional confidence in Ethereum as a strategic asset. The firm's Ethereum holdings could rise to 143,700 ETH post-issuance, positioning it among the top six institutional holders globally. This trend is supported by Ethereum's market performance, which saw a 2.05% gain in the 24 hours preceding the announcement, trading at $4,194.29. Institutional demand for Ethereum has surged in 2025, with over 11.8 million tokens held in corporate treasuries and ETFs, representing nearly 10% of the total supply Bit Digital Plan to Raise $100 Million to Expand Ethereum Treasury^[5].

The offering underscores the evolving role of convertible debt in crypto treasury strategies. By leveraging structured financing, companies can scale digital asset exposure without immediate equity dilution, balancing growth ambitions with regulatory compliance. Bit Digital's approach mirrors similar moves by peers, such as Coinbase's $2 billion convertible note offering, reflecting a broader convergence between traditional capital markets and digital asset portfolios Bit Digital Raises $135M To Boost Ethereum Holdings^[6].