Bit Digital (BTBT) investor relations material

Key trends and market context

• Digital asset treasury companies (DAATs) have surged in popularity, driven by improved U.S. regulatory clarity and strong investor appetite for leveraged Bitcoin and Ethereum exposure via equity wrappers.

• Public companies now collectively hold about 1 million Bitcoin ($110B) and 3.5 million Ethereum ($15B) on their balance sheets, reflecting significant institutional adoption.

• The DAAT boom began in spring 2025, catalyzed by regulatory changes, increased trust in crypto infrastructure, and a shift in investor sentiment post-FTX collapse.

• Regulatory tailwinds, such as the Clarity Act and Genius Act, have made the environment more favorable for Ethereum and digital asset treasuries.

• Institutional and retail investors are increasingly seeking yield and operational value from DAATs, not just passive exposure.

Business models and differentiation

• DAATs differ from ETFs by offering potential for both principal growth and yield through active capital markets strategies, staking, and operational businesses.

• Companies with integrated operating businesses (e.g., running validator nodes, DeFi activities) can generate scalable revenue and contribute to ecosystem development.

• Management quality and business strategy are key differentiators; active management and innovation can drive premiums to NAV, while passive strategies risk underperformance.

• Some DAATs are leveraging unique positions, such as combining exposure to both AI and crypto, to stand out in the market.

• Regulatory scrutiny is increasing, with potential NASDAQ constraints and new requirements (e.g., CPO status) on the horizon.

Risks, challenges, and future outlook

• Oversupply of DAATs may lead to market fatigue and slower deal flow, with investors demanding greater discounts or operational value.

• Leverage and capital issuance strategies introduce risk; prudent management and integration with real-world operations are essential for long-term success.

• The next phase is expected to bring more international DAATs, real-world asset tokenization, and continued innovation as regulatory clarity improves.

• The market is healthier than in previous cycles, with lower leverage and more robust infrastructure, but vigilance is needed as new legislation and market dynamics evolve.

• Over the next 3–6 months, deal activity may slow, but innovation and institutional participation are set to grow, especially in top tokens and new use cases.