Bit Digital is using its Ethereum holdings to fund a major financing deal for AI infrastructure firm WhiteFiber while maintaining exposure to ETH price growth.
Key Takeaways
- Bit Digital launched a $100 million delayed draw term loan facility for WhiteFiber with an option to expand the deal to $150 million.
- The company plans to fund the facility through an Ethereum denominated secured credit line, allowing it to keep ETH exposure while earning higher financing returns.
- WhiteFiber will use the funding to support its expanding AI infrastructure and high performance computing operations.
- The transaction highlights Bit Digital’s shift away from Bitcoin mining toward Ethereum treasury strategies and AI infrastructure investments.
What Happened?
Nasdaq listed Bit Digital announced that it originated a $100 million delayed draw term loan facility for a subsidiary of WhiteFiber, an AI infrastructure and high performance computing provider in which Bit Digital holds a majority ownership stake.
The financing agreement also includes an option to increase the total commitment to $150 million if both parties agree. Bit Digital said the facility is designed to support WhiteFiber’s near term growth plans as demand for AI infrastructure continues to rise.
Bit Digital has established a $100 million financing facility to support @WhiteFiber_’s growth, expandable to $150 million.
— Bit Digital, Inc. NASDAQ:BTBT (@BitDigital_BTBT) May 27, 2026
The economics are designed to exceed traditional ETH staking yields while supporting the infrastructure expansion of an asset we already own ~70% of.
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Bit Digital Uses Ethereum Backed Financing Strategy
One of the most notable parts of the deal is the way Bit Digital plans to finance the loan. The company said it expects to fund advances under the facility through an Ethereum denominated secured credit facility. This approach allows Bit Digital to retain exposure to Ethereum while also generating returns from lending activities.
The company previously secured an initial $50 million draw from Galaxy Digital at a 5.45% annual rate under a one year renewable agreement dated May 20, 2026. Bit Digital is then lending funds to WhiteFiber at a 9.5% annual interest rate, creating a financing spread that management believes can outperform traditional Ethereum staking yields.
According to the terms of the agreement, the WhiteFiber loan rate could decrease to 8% once certain operational milestones tied to the company’s NC 1 data center facility in North Carolina are completed. The deal also includes a 3% original issue discount and a 1.1x minimum repayment multiple on invested capital.
WhiteFiber Continues AI Infrastructure Expansion
WhiteFiber has been aggressively expanding its presence in the AI and cloud infrastructure market. The company, which trades on Nasdaq under the ticker WYFI, focuses on data centers and high performance computing services designed to meet growing AI demand.
The latest financing deal adds to WhiteFiber’s broader capital raising efforts. In June 2025, the company secured C$60 million in financing from the Royal Bank of Canada to support development of a tier 3 AI data center project.
Bit Digital currently owns roughly 70% of WhiteFiber’s equity stake, representing about 27 million shares. Because of this ownership structure, Bit Digital stands to benefit not only from lending returns but also from any long term increase in WhiteFiber’s valuation.
Bit Digital Moves Beyond Bitcoin Mining
The financing announcement further highlights Bit Digital’s transformation away from its original business model as a Bitcoin mining company. Earlier this year, the company announced plans to fully exit Bitcoin mining operations and focus instead on Ethereum treasury strategies, AI infrastructure, and strategic acquisitions.
In a statement included with the announcement, Bit Digital CEO Sam Tabar said:
The transaction also received approval from Bit Digital’s Board of Directors following a governance review process that included fairness opinions from Needham and Company LLC and Seaport Global Securities LLC.
Risks Remain for Investors
While the financing structure could generate higher returns, the strategy also introduces additional risks. Since the facility relies on Ethereum backed borrowing, major declines in ETH prices could trigger collateral pressures or refinancing challenges.
There are also operational risks tied to WhiteFiber’s expansion plans, including possible construction delays, cost overruns, or weaker leasing demand for AI data center capacity.
Bit Digital’s significant exposure to WhiteFiber through both debt financing and equity ownership could also increase concentration risk if WhiteFiber’s growth plans fail to meet expectations.
CoinLaw’s Takeaway
I think this deal shows how crypto companies are trying to reinvent themselves beyond mining and simple token holding strategies. In my experience, firms that successfully combine crypto treasury management with real world infrastructure investments tend to attract stronger long term investor interest. Bit Digital is clearly positioning itself as more than just a crypto company. Its focus on Ethereum based financing and AI infrastructure could become an important trend if the model delivers sustainable returns.
