This term refers to the number of bits of information used to record the colors of a pixel. The higher the Bit Depth, the more accurate the colour representation, as well as the dynamic range of a sensor.
|Bit Depth||Greyscale Levels||Potential Dynamic Range|
It’s easy to see that more “bits” gives you better colour, but the second advantage is better low light performance.
Please note that there are many more variables to considder (including operational heat, sensor heat, actual sensor charge, sensor “charge” time, etc)