BitMine faces estimated unrealized losses of $3.700–$4.000 million from its exposure to Ethereum, an impact that has put the digital treasury model based on concentrated accumulation of a single asset under scrutiny. The situation affects nearly 30% of the $13.400 million in cash and crypto the company reported and has triggered reactions ranging from valuation cuts to short positions, underscoring mounting pressure on the strategy.
The company, led by Tom Lee, designed an aggressive strategy to accumulate Ethereum with the goal of controlling 5% of the supply; it now reports more than 3,5 million ETH in its treasury, making it the largest corporate Ethereum treasury and the second-largest among listed digital-asset treasuries. Recent outlays included purchases of $821 million, $800 million, $173 million, $294 million and $113 million, according to statements and market reports.
The equity deterioration stems from a gap between BitMine’s average purchase price and the current ETH quote, with the loss per token exceeding $1.000 versus the average cost. That mismatch produces the unrealized losses figure and contributes to approximately 30% of the $13.400 million in crypto and cash reporting a direct value impact. BitMine continued to enlarge its position even after the wave of criticism and volatility.
The strategy is largely financed through share issuance. Since July 2025, the company has raised more than $10.000 million through offerings to the market and has seen its number of outstanding shares grow from 67 million to more than 260 million, an expansion that has compressed NAV per share and increased the dilution risk for existing shareholders.
Market reaction, criticism, and valuation metrics
The combination of unrealized losses and dilution produced significant selling in the stock: BitMine’s share price fell by about 50%, a figure that in several stretches exceeded the drop in Ether itself over the same period. After the publication of critical reports, intraday moves recorded one-off declines between 2% and 17% and, in some periods, an accumulated drop cited up to 65%.
Analysts and market participants have responded in a divided way. B. Riley Securities cut its price target from $90 to $47 while maintaining a buy rating, whereas Kerrisdale Capital opened a short position and described the strategy as “obsolete” and “unsustainable”; additionally, Kerrisdale warned of a reflexive loop arising from continued share issuance and noted that the premium over NAV eroded, falling from more than 2,0x in August to 1,2x in September. NAV (net asset value) is the total value of assets minus liabilities divided by the number of shares. Kerrisdale also downplayed legacy mining operations, which would have generated $3,3 million of revenue and negative EBITDA in 2024.
BitMine’s current crisis encapsulates the risks of concentrating a treasury in a single asset and financing its accumulation with continuous issuances; the sustainability of the strategy will depend on the evolution of ETH’s price and on whether the company can restore its NAV multiple without further eroding shareholder stakes.
