New York-based bitcoin (BTC-USD) miner Bit Digital (NASDAQ:BTBT) announced that it has formally started Ethereum (ETH-USD) staking operations. The move will help Bit Digital expand beyond its core Bitcoin mining operation into validating transactions on the Ethereum blockchain. BTBT stock was up 3.3% in Thursday’s after-trading following an 8.3% rise during the regular trading session.
Bit Digital will stake its ETH holdings to an Ethereum validator node, thereby securing and strengthening the blockchain. The company expects to generate revenue from the Ethereum network through validator rewards. Bit Digital believes that its diversification into a complimentary business like ETH staking will improve its overall margin and return.
To support its staking operations, Bit Digital has partnered with Blockdaemon, a leading institutional-grade blockchain infrastructure company for node management and staking. It will also participate in liquid staking through Portara, a liquid staking protocol developed by Blockdaemon and StakeWise. The company highlighted that Portara is different from other liquid staking solutions as it ensures that users interact with only verified counterparties.
As of December 20, Bit Digital had 7,904 ETH and 2,004 sETH-h (staked ETH Harbour), with a combined value of about $12.1 million. Moreover, 2,164 ETH were actively staked as of December 20, using native staking or liquid staking protocols. The company intends to continue accumulating ETH and stake essentially all of its ETH holdings over time.
Bit Digital assured investors that it remains bullish on bitcoin and will continue to invest in its mining operations. The company recently announced a 5% decline in November production to 144.1 bitcoin compared to the previous month due to higher network difficulty.
Is Bit Digital Stock a Buy?
Bit Digital stock has declined nearly 90% year-to-date amid the crypto winter and the FTX fallout. Wall Street’s Moderate Buy consensus rating for Bit Digital stock is based on one Buy rating. The average price target of $2 implies nearly 218% upside potential.