Bit Digital has filed a preliminary prospectus with the SEC for the issuance of convertible bonds totaling $100 million, intended for the purchase of Ethereum (ETH). The move, confirmed on PR Newswire, aims to strengthen the company’s digital treasury in a context of high volatility in the crypto sector.
According to the data collected by our team monitoring SEC filings, when a shelf registration is already declared effective, the pricing process for similar offerings tends to be completed within 2–4 weeks from the preliminary announcement. Industry analysts note that announcements of this nature can generate significant intraday fluctuations: in the past, comparable issuances have produced movements exceeding 10% in the very short term, depending on the terms communicated.
Meanwhile, the stock BTBT showed strong fluctuation: it closed up 8.4% during the regular session, only to drop 10% in after-hours trading, as reported by Nasdaq data on September 29, 2025. The filing indicates potential effects in terms of dilution risk and market impact, while further details on the terms of the offering are awaited.
Summary
Convertible Notes for ETH: Details, Use of Proceeds, and Banks
According to the preliminary prospectus filed with the SEC, the operation involves the issuance of convertible notes for a total amount of 100 million dollars, with the net proceeds primarily intended for the purchase of Ethereum. A residual portion may be used for general corporate purposes, investments, acquisitions, and other opportunities related to digital assets. In this context, the allocation of capital remains functional to consolidate the treasury strategy.
The institutions appointed as lead book-running managers are Barclays, Cantor, and B. Riley Securities. The convertible structure allows investors, under certain conditions, to convert the debt into equity, while the issuer obtains immediate liquidity without giving up the flexibility typical of this form of financing. For more details on how the instrument works, see our internal guide on convertible notes.
How a Convertible Works When Applied to the Purchase of ETH
The convertible note is a debt that includes an option to convert into shares. With this structure, the company immediately receives the capital, commits to paying an interest rate and meeting a deadline, but can reduce the cost of capital in the event of future conversion. In return, shareholders accept a potential dilutive effect if the stock exceeds the conversion price. It should be noted that the balance between the cost of debt and the risk of dilution is central to this choice.
In this specific case, the proceeds would be used to purchase ETH and, possibly, for staking activities. Indeed, if the price of ETH were to increase, the value of the treasury could grow; otherwise, the company would retain the flexibility offered by convertible debt, mitigating the immediate outlay compared to a traditional capital increase.
BTBT and the market: what the stock’s fluctuation means
Upon the news, the stock BTBT experienced a rise at the close of the session, followed by a correction in the after-market (Nasdaq data from September 29, 2025). This trend reflects the balance between the anticipation of increased ETH purchases financed by the issuance and the fear of potential dilution due to the conversion, with uncertainty about the rate, maturity, and conversion premium that will be set later.
The net result will depend on the final pricing: a low rate and a high conversion premium could limit dilution, while more onerous conditions risk exerting negative pressure on the stock in the short term. That said, the outcome will also depend on the market’s sensitivity to the risk/reward profile of the operation.
Digital Treasury and ETH Staking: The Evolving Strategy
Founded in 2015 and described on its own website, Bit Digital, the company completed, in 2025, the transition from a bitcoin mining operator to a company focused exclusively on Ethereum, with the goal of consolidating a digital asset treasury and implementing staking strategies. Although no significant purchases of Ether have been made since the summer of 2025, Bit Digital has been accumulating and staking ETH since 2022, following a trajectory already outlined in previous periods.
The choice to use convertible notes fits into a trend already observed in the crypto sector, where companies like MicroStrategy have employed similar instruments to finance their treasury strategies, while considering the different risk and return dynamics between BTC and ETH. In this context, the structure of the instrument remains a decisive element for the balance between growth and dilution.
Funding Methods — Operational Summary
- Equity: does not involve interest costs, but results in immediate dilution; pros: lighter balance sheet; cons: possible pressure on the price in case of a high discount.
- Traditional debt: does not involve conversion, but implies the payment of interest and the adoption of covenants; pros: no dilution; cons: higher cost of capital, especially during periods of high market volatility.
- Convertible notes: generally offer a lower interest rate compared to pure debt due to the conversion option; pros: greater flexibility and potential reduction in the cost of capital; cons: future dilution and possible overhang on the stock.
Key Data and Upcoming Steps
- Amount: 100 million dollars (issuance proposal).
- Use of proceeds: priority purchase of ETH, in addition to general corporate purposes.
- Lead managers: Barclays, Cantor, B. Riley Securities.
- Data filing: the preliminary prospectus was published on September 29, 2025, while the related shelf registration was declared effective on June 20, 2025.
- Timing: pricing and final terms will be defined in the final prospectus and subsequent supplements.
What to Monitor Now
- Rate and maturity of the notes, key elements for the overall cost of capital.
- Conversion price/premium, which will directly impact the potential dilutive effect.
- Effective sizing of the offering: the final amount may vary compared to the initial proposal.
- Purchase schedule of ETH: it will be necessary to observe whether the company will conduct concentrated acquisitions or distribute them over time.
- Hedging strategies and market dynamics, particularly the volatility observed on BTBT during the placement.
