Original | Odaily Planet Daily (@OdailyChina)

Author｜jk

At the Token 2049 conference in Singapore, Bit Digital's Chief Strategy Officer Sam Tabar shared a bold strategic vision with us—to become the only leveraged participant in the Ethereum ecosystem using uncollateralized debt, while organically combining Ethereum with the two major themes of the era, artificial intelligence, through the AI infrastructure company WhiteFiber, valued at $770 million.

Currently, digital asset treasury companies (DAT) are imitating MicroStrategy's business model, but Bit Digital has taken a different path. Unlike others that can only rely on equity dilution or collateralized debt, Bit Digital holds a 71% stake in the publicly listed AI company WhiteFiber, which has a market capitalization of $1 billion. This means they can purchase more Ethereum by monetizing their AI business without diluting existing shareholders' equity.

So, how did they stand out in the hot DAT track? Here is our in-depth conversation with Sam Tabar.

What is a Digital Asset Treasury Company? How does our version differ from those on the market?

Odaily: Mr. Tabar, it's great to meet you. DAT (Digital Asset Treasury Company) is still a relatively new concept for many outsiders. Could you first introduce your position and explain what is happening in this field?

Sam Tabar: Of course. First, we need to understand why someone would invest in a DAT. The most basic logic is that this company will hold more cryptocurrency per share in the future than it does now, which is why its trading price is above its net asset value. There are three different ways to achieve this growth.

You can achieve it through operating a business, equity financing, or debt financing. In terms of operating a business, Bit Digital stands out among all DATs because we are the only one with significant exposure to a profitable high-growth operating business. We hold a 71% stake in WhiteFiber, a publicly traded AI infrastructure company that recently completed its IPO and is listed on NASDAQ under the ticker WYFI.

Through our equity in WYFI, Bit Digital offers investors two of the most compelling investment themes in today's economy: Ethereum and AI. WYFI has a market capitalization of about $1 billion, and our stake is currently valued at approximately $770 million. This is not a small legacy asset—it's the result of our strategic decision to enter the AI space two years ago. We built it from the ground up, completed the IPO, and now it has become a high-growth AI company with a market cap of $1 billion.

Therefore, Bit Digital is not just an ordinary DAT; it is more like a strategic holding company focused on Ethereum and AI. We believe this provides investors with upside potential in these high-growth assets while offering downside protection through WYFI's strong profit potential and our ETH staking yields.

Importantly, WhiteFiber is an asset that Bit Digital can monetize in the future, and we can use those proceeds to buy more Ethereum. This allows us to increase ETH density or per-share ETH holdings in a way that other companies in the Ethereum treasury ecosystem cannot replicate. Other companies can only rely entirely on debt or shareholder dilution to increase their Ethereum purchases, while Bit Digital has a non-dilutive capital leverage, creating a completely different value proposition.

Regarding other methods: DATs should only engage in equity financing when they can deploy capital that appreciates—selling equity at a price above net asset value. Another method is through debt financing, which is often the most direct way to purchase cryptocurrency. However, the wrong type of leverage can be catastrophic. Cryptocurrency is cyclical—we are currently in a bull market, but there will always be the next bear market.

As a long-established public crypto company, Bit Digital's management team has experienced three cryptocurrency cycles. We know how to position and manage a public company under different market conditions. Unfortunately, many other management teams seem to believe that there will never be another winter, but winter will inevitably come.

For digital asset treasury companies, the only responsible leverage is uncollateralized debt. Collateralized leverage—using crypto assets as collateral—means that during a bear market, lenders can seize assets and force bankruptcy, which is an extremely dangerous form of debt. This week, Bit Digital became the only digital asset treasury company in the Ethereum ecosystem with uncollateralized debt to purchase Ethereum. We are the only leveraged participant in the Ethereum ecosystem.

Why are you optimistic about Ethereum?

Odaily: You are essentially positioning Ethereum as a pillar of future capital markets. What specific aspects of Ethereum's infrastructure make you believe it is suited for this role?

Sam Tabar: One of the most important elements is the underlying technology, primarily smart contracts. Smart contracts provide a way to create a decentralized financial system. I believe Ethereum can rewrite the entire financial system through this technology.

Think about how the current financial system profits from friction. When I transfer money to you, intermediaries—banks or other institutions—charge fees for that transaction. With Ethereum smart contracts, value can be automatically transferred through so-called atomic swaps when certain conditions are met. This is revolutionary because it eliminates intermediaries and traditional banking infrastructure.

This creates a technological foundation to fundamentally rewrite the financial system. While Bitcoin lacks this capability, other blockchains like Solana do have smart contract functionality. However, Wall Street will always choose Ethereum because of its reliability—Ethereum runs consistently, while Solana experiences interruptions. Institutional finance needs a blockchain that won't crash, which is why they choose Ethereum.

Odaily: Before institutional capital fully embraces Ethereum, what risks do you think need to be addressed?

Sam Tabar: Institutional capital is already flowing into Ethereum, especially with the regulatory clarity introduced by Congress, particularly regarding stablecoin regulations. Congressional bills like the Genius Act and the Clarity Act are providing a comprehensive regulatory framework for stablecoins. Once this legislative framework is completed, we will see a significant expansion in the use of stablecoins, most of which are built on Ethereum. This legislative clarity regarding stablecoins will drive a lot of activity on the Ethereum network.

DAT vs ETF: A Comparison of Sustainability

Odaily: Let's talk about the key differences between DAT and ETF: ETFs have been a major driver of this bull market, and now DAT is on the rise. Why might DAT be more sustainable?

Sam Tabar: DAT offers more upside potential because you can use leverage. I am surprised that there are currently no other companies in the Ethereum ecosystem using uncollateralized leverage—we are the only one. This is surprising because Michael Saylor has already demonstrated how to be creative with capital structure, and uncollateralized leverage is a key tool for creating a premium above net asset value. I am not sure why other Ethereum ecosystem companies have not adopted this approach, but we are the first to implement it.

Odaily: Besides stablecoins, what are your expectations for the regulatory acceptance of the DAT model?

Sam Tabar: The government's attitude towards DAT is quite positive. Regulators recognize the success of the MicroStrategy model, and it is inevitable that the Ethereum ecosystem will adopt Michael Saylor's strategy.

The Fusion Strategy of Ethereum + AI

Odaily: Let's talk about the fusion of Ethereum and AI: how do you see the relationship between these technologies as parallel infrastructures, and how is this specifically reflected in Bit Digital?

Sam Tabar: This is reflected very directly in Bit Digital, as our company consists of two main components: our Ethereum holdings and our 71.5% stake in WhiteFiber. WhiteFiber is a pure AI infrastructure company that just completed a very successful IPO last month, and we are very optimistic about WhiteFiber's future.

To my knowledge, Bit Digital is the only publicly traded company in the world that directly engages with the two most important technological narratives of our time: Ethereum and AI. The valuations are transparent—you can see the value of our Ethereum holdings in real-time, and you can check the value of WhiteFiber on NASDAQ at any time. There is no need for any guesswork; the market continuously provides valuations for our Ethereum exposure and AI exposure. I don't know of any other company that can simultaneously provide direct exposure to these two transformative technologies.

Future Vision and Investment Advice

Odaily: Looking ahead two to three years, how do you envision Bit Digital's identity? Will it be remembered as a DAT, a capital market pioneer, or as an AI and blockchain infrastructure company?

Sam Tabar: That's a great question. I believe people will see us as a pioneer in capital markets. People ask me if I am an Ethereum maximalist—actually, I am a shareholder maximalist. I want our company to engage with the two most promising fields of our time. That’s how we position the company, and I think it demonstrates our creativity and forward-thinking investment vision as capital market participants.

Odaily: For retail or institutional investors who are just learning about Bit Digital or the concept of the Ethereum-AI fusion, what is the most compelling reason to pay attention?

Sam Tabar: We already know that Ethereum technology is beginning to decentralize financial infrastructure, and we are prepared for this transformation. We also know that AI is disrupting the traditional job market, and we are equally prepared for that. Whether we can stop it or not, these changes are happening, so the best strategy is to be ready for these inevitable shifts. That is exactly what we are doing at Bit Digital.

Entrepreneurial Anecdote: From Inspiration in Singapore to a $1 Billion Valuation

Odaily: During the establishment of Bit Digital, are there any interesting stories that might particularly resonate with readers?

Sam Tabar: In fact, the founding idea of WhiteFiber originated a few years ago in Singapore. At that time, I was with my co-founder, and ChatGPT had just been launched. I showed it to my co-founder and said, "Look at this—it's amazing. You can ask it any question, and it gives perfect answers." I put the screen in front of him and said, "Ask the most complex question you can think of."

He asked, and was amazed by the answer. He asked another question, and the result was equally shocking. Then he asked, "How do we get involved?" We realized that AI is driven by infrastructure—GPUs and specialized data centers. As Bitcoin miners, we thought, "This could actually be a better business model." The transition from ASIC to GPU was not as difficult as we initially thought.

We made that leap, acquired our first customer a few years ago, and now we have over 20 enterprise clients, generating more than $100 million in revenue for WhiteFiber each year. We operate multiple data centers in North America and successfully completed the IPO of the business. The entire journey began with that conversation in Singapore at the end of 2022 when ChatGPT was first launched.

We have an incredible team at WhiteFiber, with four co-founders, each bringing unique expertise. One person excels in business development, another is responsible for operational institutionalization, the third manages risk, and I serve as the marketer. With such a complementary skill set, the transformation has gone quite smoothly.

Essentially, the future is coming rapidly—it is already here. The key is to be prepared for the changes ahead; you must have strategic thinking. Continuously thinking about what will happen in the future is a mental skill that must be cultivated, just like working out in the gym to build muscle. Thinking ahead is not innate—it's much easier to simply react or follow instructions. But developing the ability to anticipate future trends and position accordingly is a core competency I encourage everyone to cultivate.

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