BitMine Expands ETH Holdings Despite $6.5B in Undisclosed Losses
BitMine Immersion Technologies, an Ether treasury firm backed by Fundstrat's Tom Lee, has expanded its ETH holdings for the second time in as many weeks, even as large undisclosed losses underscore the strategy's risks.
The company said it bought an additional 101,901 Ether last week, bringing its total holdings to 5.08 million ETH. His combined crypto and cash holdings now stand at $13.3 billion.
Source: Wu Blockchain
The latest purchase follows the purchase of 101,627 ETH a week ago, which was the company's largest holding since December.
Despite the aggressive buying, BitMine is sitting on an undisclosed loss of more than $6.5 billion, based on total investments estimated at $17.6 billion, reflecting the impact of the recent volatility in ether prices.
NYSE-listed BMNR's share price is down more than 20% year-to-date, according to Yahoo Finance data.
The company is still producing a portion of its holdings. BitMine has a stake of 3.7 million ETH, a strategy that provides a constant stream of income even during price drops, allowing it to secure the Ethereum network and earn rewards by verifying transactions.
BitMine's Unexpected Loss on ETH Treasury Soars to $6.5 Billion Source: Drop the rod
Related: Crypto Biz: Same Players, Big Bets As Crypto Eyes Return
Ether, crypto markets show signs of stabilization
BitMine's big purchases come as the broader crypto market shows the first signs of stability after months of decline through March.
Ether bounced back above $2,400 last week after falling to lows near $1,800 earlier this year, according to TradingView data. Despite the possible recovery, the second-largest crypto by market cap is down as much as 23 percent year-to-date.
The rebound reflects a broader rally in stocks and other risk assets in recent weeks, suggesting an improvement in investor sentiment.
However, the volatility highlights the challenges facing crypto-treasury players. Companies that store large stocks of digital assets are very vulnerable to price fluctuations, which can cause significant unexpected losses even when they continue to buy.
While strategies such as dividends can generate yield, they often do little to offset large declines in asset prices, leaving balance sheets vulnerable to market cycles.
Related: Michael Seiler's Strategy 3.2K Bitcoin Increases to $78K in BTC
