TLDR
- Tom Lee defends BitMine’s $6 billion ethereum paper loss, calling it a natural outcome of the company’s treasury strategy.
- BitMine now holds 4.24 million ETH worth $9.6 billion, down sharply from $14 billion in October during the crypto downturn.
- Lee says the company is designed to track and outperform ethereum over full market cycles, like an index fund.
- The firm purchased 41,788 ETH last week even as unrealized losses mounted, showing commitment to its approach.
- Lee predicts crypto markets may hit bottom soon but warns deleveraging could persist into early 2026.
Tom Lee isn’t backing down. The BitMine Immersion chairman says his company’s $6 billion in paper losses are exactly what the strategy calls for.
Bitmine Immersion Technologies, Inc., BMNR
Lee addressed critics in a series of X posts this week. He framed the unrealized losses as an expected outcome rather than a strategic failure.
“Crypto is in a downturn, so naturally ETH is down,” Lee explained. He called paper losses “not a bug — it’s a feature.”
The company’s 4.24 million ETH holdings are now valued at roughly $9.6 billion. That’s a steep drop from nearly $14 billion just four months ago.
BitMine added more than 40,000 ETH before the latest price decline. The purchase drew attention to the firm’s concentrated exposure.
Lee likened BitMine to an index-style product. He asked why treasury companies face harsher criticism than traditional index funds during downturns.
Index Approach to Ethereum Holdings
BitMine operates as an ethereum treasury company focused on long-term accumulation. The strategy prioritizes staking yield and multi-year performance over short-term trading.
This mirrors the approach of bitcoin treasury firms. They accept volatility as the cost of maintaining long-duration exposure to digital assets.
But scale matters. BitMine’s massive holdings mean price movements create outsized impacts on its balance sheet.
The company projects annual staking revenue around $164 million. That income offers modest protection when prices fall sharply.
Lee warned the crypto market is still unwinding leverage. He expects the deleveraging phase could stretch into early 2026.
In a CNBC interview, Lee said crypto suffered worse than anticipated. He blamed capital rotation into precious metals for some of the weakness.
Gold and silver jumped 37.4% and 106.9% before sharp reversals. Gold hit $5,600 an ounce then posted its biggest one-day drop since 1983.
Technical Signals Point to Potential Bottom
Crypto prices continued sliding after Lee’s television appearance. Bitcoin traded at $77,357, down 11.8% over seven days. Ethereum fell to around $2,265, dropping more than 22% in the same period.
Lee referenced technical analysis suggesting markets may be bottoming. He cited work from advisor Tom DeMark, who forecast Bitcoin reaching the high $70,000s and ether hitting around $2,400.
Lee said both price targets and timing indicators have now aligned. This could signal a turning point for digital assets.
Despite the downturn, BitMine keeps buying. The company added 41,788 ETH worth approximately $96 million last week.
Total holdings now exceed 4.28 million ETH. That represents more than 3.5% of Ethereum’s total circulating supply.
SEC filings show BitMine accumulated most of its position at an average price near $4,000 per ETH. Current prices sit roughly 43% below that level.
Lee maintains Ethereum fundamentals remain solid. He pointed to growing network activity and Wall Street firms expanding their digital asset infrastructure.
Lee’s bottom line hasn’t changed. “Ethereum is the future of finance,” the firm stated.
BitMine acquired 41,788 ETH worth roughly $96 million last week, bringing its total position to more than 4.28 million coins.
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