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Bit Digital pledges 74% of staked Ethereum to a Galaxy loan

Bit Digital converted 73,235 ETH into 66,192 LsETH and posted 49,000 LsETH as about $105.6 million collateral under a Galaxy master loan agreement with a potential collateral call window.

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Bit Digital said it funded WhiteFiber, a majority-owned AI infrastructure company, without selling Ethereum or issuing new shares, but it added a new financing dependency tied to its crypto treasury. Galaxy Digital lent Bit Digital $50 million in a borrowing associated with 49,000 pledged LsETH, while Bit Digital also became a lender to WhiteFiber, according to CryptoSlate.

In its second-quarter results, Bit Digital converted 73,235 ETH into 66,192 LsETH, then reported the pledged 49,000 LsETH as a $105.6 million digital-asset collateral receivable. The company retained 17,192 LsETH, worth $27.6 million, as a buffer against margin requirements.

Bit Digital drew the $50 million loan on May 20 at a 5.45% interest rate, and CryptoSlate reports the WhiteFiber delayed-draw facility began at $100 million with the potential to rise to $150 million only by mutual written agreement. The master loan agreement gives Bit Digital 24 hours after an ordinary margin-call notice to add collateral, with Galaxy able to partially liquidate collateral if a required call is not met.

CryptoSlate also notes that Bit Digital recorded a $46 million non-cash impairment on LsETH in the same quarterly release and said it sold no ETH during the quarter. The outlet reports the company characterized the impairment as consistent with LsETH being carried at cost less impairment rather than ETH fair-value accounting, and it said the collateral mechanics were established in public documents but not the company’s precise proximity to any call threshold.

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