Bit Digital revenue falls as Ethereum slump hits staking income
Earnings overview
Bit Digital posted a 13.6% drop in first-quarter 2026 revenue to $27.9 million, pressured by weaker Ethereum staking rewards and lower digital asset prices. Net loss narrowed to $146.7 million from $185.3 million in the prior quarter, the company said in its latest report.
The stock slipped 3.7% in after-hours trading, after closing up 4.9% on Thursday. Shares are up 39% over the past month but remain 7% lower over the past six months.
Ethereum staking and treasury shift
Revenue from Ethereum staking fell 29.4% from the previous quarter to $2.3 million, reflecting a 29% decline in ether’s price during the period and smaller native staking balances. Bit Digital said it reallocated about 70,000 ETH into liquid staking to increase flexibility in its treasury management.
At the end of March, the company held roughly 154,444 ETH valued near $327 million at a March 31 price of $2,104, with an average acquisition cost of $3,045 per token. Ether later traded around $2,245.
The results underscore the exposure of staking income to price moves as well as network rewards. Early-2026 staking yields of about 3.3% APY meant that price declines could easily overshadow validation income, the company noted.
Cloud, co-location and mining results
Cloud services revenue declined 13.1% from the prior quarter to $16.8 million. Co-location services generated $4.8 million.
Revenue from crypto mining operations fell 32.9% to $3.7 million, hit by reduced bitcoin production and lower average prices.
Bit Digital continued to wind down its bitcoin mining footprint after a 2025 decision to pivot toward an Ethereum-focused treasury and staking strategy. Management said mining remains cash-flow positive but is no longer a growth priority, with capital redirected to Ethereum activities and computing infrastructure.
Industry backdrop for bitcoin mining
The company’s pullback from bitcoin mining reflects tighter economics across the sector following the April 2024 block reward halving. Profitability has increasingly concentrated among operators with power costs below roughly $0.10 per kilowatt-hour, leaving smaller or less efficient miners with thinner margins and limited expansion prospects.
Reallocating capital away from this low-margin segment marks a deliberate shift toward businesses with perceived stronger long-term returns, Bit Digital indicated.
WhiteFiber and the high-performance computing push
Bit Digital’s longer-term growth profile is now more closely linked to its high-performance computing subsidiary, WhiteFiber. The company holds a controlling interest in WhiteFiber, which raised nearly $160 million in an August 2025 initial public offering. By March, Bit Digital owned about 27 million WhiteFiber shares.
The HPC market is projected to grow from about $64.67 billion in 2026 to more than $128.84 billion by 2034, implying a compound annual growth rate near 9.0%. WhiteFiber, however, has shown mixed recent performance: first-quarter revenue rose 31% year-on-year to $21.9 million, but earnings per share came in below analyst expectations.
Market context for core assets
The broader digital asset backdrop remains uneven. Bitcoin has struggled to sustain levels above the $82,000 resistance area, with recent gains seen as driven more by derivatives activity than by broad-based spot buying, a pattern that can suggest fragility in rallies. Strong inflows into bitcoin exchange-traded funds, totaling about $1.97 billion in April, continue to provide underlying demand.
Ethereum has been trading near $2,270, with prediction markets assigning roughly a 68% chance that the price will stay above $2,200 through the end of May. Those expectations point to modest near-term price action rather than a sharp rebound.
What to watch next
Market participants are likely to focus on two main areas:
- how Bit Digital manages its sizable Ethereum treasury, worth $327 million at quarter-end, and the balance between native and liquid staking in a market with limited near-term upside expectations
- how effectively WhiteFiber executes its expansion strategy in the growing HPC market, which now acts as a key diversification away from direct cryptocurrency price exposure
The company’s first-quarter numbers highlight both the drag from softer digital asset prices and the growing weight of its pivot toward Ethereum and computing infrastructure in shaping future performance.
Curious about Ethereum’s next moves? Deepen your strategy with our guide on Ethereum fundamentals and network mechanics today.
Disclaimer: The content on this page is provided for general informational purposes only and does not represent the views or financial advice of Toobit. We make no guarantees regarding the accuracy or completeness of this information and shall not be held liable for any errors, omissions, or outcomes resulting from its use. Investing in digital assets involves risk; users should independently evaluate their financial situation and the risks involved. For further details, please consult our Terms of Service and Risk Disclosure.
