{"slug": "bit-digital-pledged-74-of-its-staked-ethereum-position-to-a-loan-that-can-a-24", "title": "Bit Digital pledged 74% of its staked Ethereum position to a loan that can trigger a 24-hour collateral call", "summary": "Bit Digital Inc. pledged 49,000 LsETH, valued at $105.6 million, as collateral for a $50 million loan from Galaxy Digital, drawn on May 20 at a 5.45% interest rate, to fund its AI infrastructure subsidiary WhiteFiber without selling Ethereum or issuing new shares. The loan agreement allows Galaxy to issue a margin call with a 24-hour collateral requirement, and Bit Digital recorded a $46 million non-cash impairment on LsETH in Q2, while net loss attributable to shareholders reached $107.2 million. CEO Sam Tabar said the board is evaluating share repurchases.", "body_md": "Bit Digital funded the majority-owned AI infrastructure company WhiteFiber without selling Ethereum or issuing new shares, but the route added a new dependency to its crypto treasury.\n\nGalaxy Digital lent Bit Digital $50 million in a borrowing associated with 49,000 pledged LsETH, and Bit Digital separately became a lender to WhiteFiber.\n\nThe company said in its second-quarter results that it converted 73,235 $ETH into 66,192 LsETH, the liquid-staking token it received in the exchange. It reported the pledged 49,000 LsETH as a $105.6 million digital-asset collateral receivable and retained 17,192 LsETH, worth $27.6 million, as a buffer against margin requirements.\n\nBit Digital drew the $50 million from Galaxy on May 20 at a 5.45% interest rate. The separate WhiteFiber delayed-draw facility started at $100 million and could rise to $150 million only by mutual written agreement.\n\nLsETH is associated with Bit Digital's company-level Galaxy borrowing. WhiteFiber's facility is backed by a pledge of Enovum NC-1 Topco stock and a separate parent guaranty from White Fiber Operating Partnership.\n\nGalaxy's master loan agreement gives Bit Digital 24 hours after an ordinary margin-call notice to add collateral. If a required call is not met, Galaxy can partially liquidate collateral to restore the contractual level. A faster nine-hour procedure may apply if an urgent threshold is specified.\n\nThe public documents establish price-sensitive margin mechanics, but not Bit Digital's proximity to a call or liquidation.\n\n## The impairment was an accounting hit, not a sale\n\nThe same quarterly release recorded a $46 million non-cash impairment on LsETH, and Bit Digital said it sold no $ETH during the quarter. LsETH is carried at cost less impairment, unlike $ETH's fair-value treatment, so the charge was not a realized loss.\n\n$ETH staking revenue fell to $900,000 from $2.3 million in the first quarter, while net loss attributable to Bit Digital shareholders reached $107.2 million. The impairment was only one component of those results and does not indicate that the Galaxy loan breached a collateral threshold.\n\nThe financing preserved the $ETH position and avoided immediate dilution, but it also made part of the treasury's value relevant to WhiteFiber's funding chain.\n\nThat trade-off is now part of a broader capital-allocation debate: CEO Sam Tabar said the board is evaluating share repurchases, subject to board and shareholder approval.", "url": "https://wpnews.pro/news/bit-digital-pledged-74-of-its-staked-ethereum-position-to-a-loan-that-can-a-24", "canonical_source": "https://cryptonews.net/news/ethereum/33294585/", "published_at": "2026-08-14 18:30:00+00:00", "updated_at": "2026-08-14 18:47:54.030894+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-infrastructure"], "entities": ["Bit Digital", "Galaxy Digital", "WhiteFiber", "LsETH", "Ethereum", "Sam Tabar", "Enovum NC-1 Topco", "White Fiber Operating Partnership"], "alternates": {"html": "https://wpnews.pro/news/bit-digital-pledged-74-of-its-staked-ethereum-position-to-a-loan-that-can-a-24", "markdown": "https://wpnews.pro/news/bit-digital-pledged-74-of-its-staked-ethereum-position-to-a-loan-that-can-a-24.md", "text": "https://wpnews.pro/news/bit-digital-pledged-74-of-its-staked-ethereum-position-to-a-loan-that-can-a-24.txt", "jsonld": "https://wpnews.pro/news/bit-digital-pledged-74-of-its-staked-ethereum-position-to-a-loan-that-can-a-24.jsonld"}}