Bit Digital posts $107m loss amid pivot to AI infrastructure
Despite a significant net loss driven by non-operating items, Bit Digital reports a 42% sequential rise in Cloud Services revenue and outlines plans for its NC1 facility.
Bit Digital, Inc. reported a $107 million net loss for the second quarter of 2026, a figure primarily driven by non-operating items including mark-to-market digital asset losses and derivative revaluations. The company recorded an $86 million hit from these non-operating activities, which included a $46 million non-cash impairment on liquid staked Ethereum utilised as collateral for its WhiteFiber operations. Management clarified that the impairment reflects accounting treatment rather than a realised loss, noting that the firm maintains an additional Ethereum buffer to mitigate margin call risks on the bridge facility.
The reported loss contrasts with a 42% sequential increase in Cloud Services revenue, underscoring the company’s active transition from legacy Bitcoin mining to artificial intelligence infrastructure. Bit Digital defines itself as a strategic asset company rather than a passive treasury, moving capital between digital assets and AI infrastructure to secure recurring cash flows. Management views Ethereum as a protocol-native reserve that generates yield while providing liquidity for opportunistic investments in high-growth sectors, including data centres.
To support its WhiteFiber operations without equity dilution, management utilised Ethereum holdings to originate a $150 million delayed draw term facility. The firm is also evaluating a program to write out-of-the-money covered calls against a limited portion of its WhiteFiber holdings to generate premium income. Registration statements are planned for later this quarter to enable this income generation, a move management emphasised is not a step toward exiting the core investment position.
A significant valuation disconnect remains a focal point for the board, with the stock trading at a discount exceeding 40% to net asset value. Management described this discount as unacceptable and is vigorously discussing a share buyback program to address the disparity. Liquidity for such a program could be sourced from the repayment of the WhiteFiber bridge facility or future asset sales, as the company prioritises recycling capital into a development pipeline of new infrastructure opportunities over issuing equity at current valuation levels.
Looking ahead, the third quarter is expected to reflect the full operationalisation of the NC1 flagship facility, which operates under a 10-year agreement representing approximately $865 million of total contracted revenue. The firm has approximately $1 billion in remaining performance obligations, with $136.7 million expected to be recognised in 2027 alone. Bit Digital has committed to not selling any WhiteFiber shares through the remainder of 2026, prioritising long-term equity appreciation over near-term liquidity.
