Bit Digital’s $100M Ethereum-backed loan draws scrutiny

Bit Digital set up a $100M Ethereum-backed loan facility for WhiteFiber, with expansion potential. The move drew scrutiny, causing Bit Digital’s stock to dip 3.3%.

Bit Digital has launched a $100 million delayed-draw term loan facility for a subsidiary of WhiteFiber, an AI infrastructure and high-performance computing provider in which it holds a majority stake. The facility may be expanded to $150 million by mutual agreement and is intended to support WhiteFiber’s near-term growth initiatives. The loan is backed by an Ethereum-denominated secured credit line, enabling Bit Digital to maintain ETH exposure while earning a financing spread that surpasses traditional staking yields. The loan to WhiteFiber carries a 9.5% annual interest rate, potentially reduced to 8% upon achieving certain milestones. It also features a 3% original issue discount and a 1.1x minimum multiple-on-invested-capital repayment. To fund the loan, Bit Digital drew an initial $50 million from Galaxy Digital at a 5.45% rate. The arrangement has attracted market scrutiny, with Bit Digital’s stock falling 3.3% in pre-market trading as investors reacted to the company’s expanded use of its Ethereum treasury. B. Riley Securities also participated by purchasing part of the term loans.