Bit Digital Provides 74% of LsETH as Galaxy Collateral

Bit Digital has provided approximately 74% of the LsETH received from its staking position in Ethereum (ETH) as collateral for Galaxy loans. If the collateral value falls below the contract standard, a regular margin call requires additional collateral within 24 hours, while an emergency margin call requires it within 9 hours. Bit Digital announced on the 13th that it staked 73,235 ETH to receive 66,192 LsETH, of which 49,000 LsETH was provided as collateral. The amount tied up as collateral represents about 74% of the total LsETH. The 49,000 LsETH held as collateral is reflected as a $10.56 million digital asset collateral bond on the balance sheet. Bit Digital explained that LsETH is treated under different accounting standards than ETH. The key aspect of this transaction is that it secured cash without selling its ETH holdings. In the second quarter, Bit Digital secured $50 million in liquidity by using part of its Ethereum financial assets as collateral. According to a filing with the U.S. Securities and Exchange Commission, the initial withdrawal amount for the Galaxy loan was $50 million, with an interest rate of 5.45% per annum. Bit Digital's total revenue for the second quarter was $32.1 million, with a net loss of $10.72 million. Revenue from Ethereum staking decreased to $900,000 compared to the previous quarter. Bit Digital is transitioning to a structure that reduces the proportion of its mining-centric business starting in 2025, while concurrently implementing ETH financial strategies and AI/high-performance computing infrastructure.

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