Bitmine's Ethereum Bet Nears $9B Paper Loss as ETH Falls Below $1,800

What happened: Bitmine Immersion Technologies (BMNR) now faces an $8.9 billion unrealized loss on its 5.4 million ETH treasury, as Ethereum dropped below $1,800. The firm's ETH holdings, acquired at an average cost of ~$3,476 per ETH, are now worth about $10 billion versus an ~$18 billion cost basis. Around 87% of Bitmine's ETH is staked, generating an estimated $276 million in annualized staking revenue. BMNR shares fell below $17, down 5.9% on Wednesday and 28% since early May—the lowest since its crypto pivot.

Why it matters: Bitmine's "Alchemy of 5%" strategy—amassing and staking ETH—was designed as a countercyclical play, but the scale of paper losses now threatens to cap upside and create an overhang for both the company and the ETH market. While CEO Tom Lee maintains that such drawdowns are "a feature, not a bug," and reiterates a $250,000 long-term ETH target, critics argue the strategy's risks are now materializing. The company is seeking to raise $300 million via a preferred stock offering with a 9.5% dividend, echoing tactics used by Bitcoin-focused treasuries.

Source: CoinDesk