Bit Digital Lends $100M to WhiteFiber, Funded by an Ethereum Credit Line, Pocketing a 400-to-450-Basis-Point Spread
Bit Digital Capital, Inc., a subsidiary of Nasdaq-listed Bit Digital, Inc. (BTBT), has originated a $100 million term loan to AI data center operator WhiteFiber, funding the facility through an Ethereum-backed credit line from Galaxy Digital and locking in a financing spread of roughly 400 to 450 basis points.
New York-headquartered Bit Digital (Nasdaq: BTBT) disclosed the transaction on May 27, 2026, via SEC Form 8-K and an accompanying press release. The loan goes to an operating subsidiary of WhiteFiber, Inc. (Nasdaq: WYFI), the AI infrastructure company that Bit Digital rebranded from its HPC division in February 2025 and subsequently listed separately on Nasdaq.
Bit Digital retains a majority ownership stake in WhiteFiber, making this a related-party transaction that required independent board oversight and third-party fairness opinions from both sides. Needham and Company LLC advised Bit Digital, while Seaport Global Securities advised WhiteFiber.
Deal Structure
The facility is structured as a delayed draw term loan, meaning WhiteFiber can pull funds in tranches rather than receiving all $100 million at once. The two companies can also agree to expand the facility to $150 million. WhiteFiber will pay 9.5% annual interest until a contractual Rate Step Down Event occurs, after which the rate falls to 8%. The specific conditions that trigger the Rate Step Down Event are not publicly defined in the filing.
To fund the advances, Bit Digital drew $50 million on May 20, 2026 under a new Master Digital Currency Loan Agreement with Galaxy Digital, paying 5.45% annual interest on a one-year automatically renewable term. Under this structure, Bit Digital borrows against its Ethereum treasury through an ETH-denominated secured credit facility; the proceeds are then converted and deployed as a dollar-denominated loan to WhiteFiber, allowing Bit Digital to retain upside on any ETH price appreciation.
Bit Digital also assigned $20 million of one advance to B. Riley Securities on the same economic terms, with a 90-day term.
The net result is a financing spread of approximately 400 to 450 basis points, depending on whether the step-down rate applies. That figure is a Verse Press calculation based on the SEC-disclosed rates.
That compares favorably to the roughly 2.7% annualised staking yield Bit Digital reported from its Ethereum validator operations in February 2026.
Ethereum Treasury Context
As of March 31, 2026, Bit Digital held approximately 155,444 ETH. About 62% of that, or roughly 96,322 ETH, was actively staked, down from 89% at year-end 2025. The company said it reduced staked positions over that period to increase treasury flexibility for exactly this kind of capital deployment. Sam Tabar, CEO of Bit Digital, said the transaction "reflects a disciplined and differentiated capital allocation approach" that balances "execution, governance considerations, shareholder alignment, and long-term strategic value creation."
The company expects the facility to deliver risk-adjusted economics that exceed traditional ETH staking yields.
Network-wide, approximately 31.1% of total ETH supply was staked as of March 2026, and annualised validator yields have hovered around 2.7% to 4%, well below what Bit Digital earns through this lending arrangement.
WhiteFiber's Pipeline
WhiteFiber reported $21.9 million in total revenue for Q1 2026, up 31% year over year, with colocation revenues up 190% to $4.8 million. The company held $921 million in remaining performance obligations for colocation services as of March 31, representing contracted future revenue not yet recognised. WhiteFiber also posted Adjusted EBITDA of $3.0 million for the quarter and held $75.8 million in cash as of March 31, 2026, figures that are directly relevant to its capacity to service future debt obligations.
It also completed the purchase of its MTL-3 facility in Quebec in May 2026, which cuts annual lease costs by approximately CAD $3.1 million.
The capital from Bit Digital is intended to support near-term growth, including the NC-1 campus in Madison, North Carolina, which is targeting 76 megawatts of gross capacity by end of 2026. Duke Energy is delivering 54 megawatts of utility power to the site, with initial revenue from a 40-megawatt IT load agreement with Nscale expected in the second or third quarter of this year.
WhiteFiber also signed a $17 million two-year contract with Hyperbolic in May 2026.
Why This Model Matters Beyond the US
The Bit Digital structure carries implications for infrastructure operators in markets where traditional lending for tech buildout is expensive or unavailable. In Sub-Saharan Africa, on-chain transaction volume reached $205 billion in the twelve months through June 2025 (the most recent period for which data is available), a 52% year-over-year increase, yet data center capacity in the region remains thin and concentrated in South Africa and Egypt.
A financing model that uses an existing crypto treasury to fund physical compute infrastructure at a positive yield spread could be replicable by operators in Nigeria, Kenya, or India who hold meaningful ETH positions but lack access to conventional credit. That replicability is conditional, however, on those markets developing the custody infrastructure, regulatory licensing for ETH-backed lending, and access to institutional counterparties of the kind the Bit Digital trade required. India's crypto regulatory environment, for instance, remains unsettled as of 2026.
The governance framework Bit Digital applied here, including independent board committees at both companies and fairness opinions from Needham and Company LLC and Seaport Global Securities, also provides a template for listed and unlisted Web3 companies in markets working toward regulatory clarity.
South Africa's FSCA licensing framework, Nigeria's 2025 Investment and Securities Act, and Kenya's VASP Bill (October 2025) are all building toward environments where Ethereum-backed lending structures could eventually operate within a defined legal perimeter.
Looking Ahead
Galaxy Digital's increasing appetite for institutional crypto lending, evidenced also by a $500 million Bitcoin-backed revolving credit facility it secured in April 2026, suggests the infrastructure for this kind of trade is becoming more accessible.
A broader pattern is emerging among crypto-native operators using liquid digital asset holdings to finance physical infrastructure without dilutive equity raises.
For WhiteFiber, the immediate question is whether its data center ramp delivers the revenue needed to service its growing debt load, including $230 million in convertible notes already on its books. The company entered this expansion phase with $75.8 million in cash and $921 million in contracted future revenue as counterweights, but the scale of its capital commitments means execution on projects like NC-1 will be closely watched.