TLDR
- BitMine bought $65 million worth of ETH on Thursday through six transactions via Galaxy Digital’s OTC desk
- The company now holds more than 1.5% of Ethereum’s circulating supply, making it the largest corporate ETH holder
- BMNR stock rose 5.58% on Wednesday to $44.86, up 540% year-to-date but down 67% from July highs
- Chairman Tom Lee maintains his $60,000 ETH price target, calling Wall Street’s crypto adoption a “1971 moment” for Ethereum
- ETH reserves on centralized exchanges hit a three-year low as corporate purchases and ETFs absorb supply
BitMine Immersion Technologies made another major move in the crypto space Thursday. The company purchased $65 million worth of Ethereum for its treasury.
This marks BitMine’s first ETH purchase this month. The acquisition happened through six separate transactions using Galaxy Digital’s over-the-counter trading desk.
Blockchain analytics firm Arkham Intelligence tracked the transactions. BitMine now holds more than 1.5% of Ethereum’s total circulating supply.
The company remains the largest corporate holder of ETH. All purchases were made with cash, not leverage, according to a BitMine representative.
“All ETH is spot purchases with cash,” the representative told Cointelegraph on Tuesday. This approach shows the company’s commitment to building its crypto position without taking on debt.
The timing of this purchase comes as ETH supply tightens across the market. Centralized exchange reserves hit a three-year low recently.
Corporate Buying Drives Supply Shortage
The supply crunch stems from multiple factors. Corporate treasury purchases like BitMine’s continue removing ETH from circulation.
Exchange-traded funds also absorb supply regularly. This combination has shrunk available ETH supply by 38% since 2022.
BitMine’s stock responded well to the crypto market activity. BMNR shares closed Wednesday at $44.86, gaining 5.58% for the day.
The stock dipped slightly in after-hours trading. It fell 0.54% to end the extended session at $44.62.
Year-to-date performance remains strong despite recent volatility. BMNR has climbed 540% since January 1st.
However, the stock still trades well below its peak. It crashed 67% from its July 3rd high of $135.
Trading volume stays elevated for BitMine shares. The 10-day average volume sits at 51.07 million shares.
Chairman Maintains Bullish Outlook
Tom Lee, BitMine’s chairman, appeared on a podcast Wednesday. He used the platform to reinforce his long-term ETH price prediction.
Lee still expects Ethereum to reach $60,000 eventually. He compared the current moment to a historic stock market event.
“Wall Street moving onto crypto rails, I think, is like a 1971 moment for Ethereum,” Lee said. He referenced August 17, 1971, when the New York Stock Market set volume and gain records.
That day came after President Nixon implemented wage and price freezes. The moves aimed to fight inflation and strengthen the dollar.
Lee believes corporate adoption of crypto creates similar opportunities. He sees Ethereum as a primary beneficiary of this shift.
The chairman also highlighted advantages for companies holding ETH. Public companies with ETH treasuries should trade at premiums, he argues.
These companies can stake their holdings for additional returns. ETH staking currently yields around 3% annually.
ETFs face constraints that companies don’t. Liquidity requirements prevent them from staking their entire ETH holdings.
“ETFs, Ethereum ETFs cannot fully stake because of liquidity requirements,” Lee explained. This gives companies like BitMine a competitive edge.
BitMine’s current trading multiple reflects this advantage. The company trades at 1.13 times its modified net asset value according to Strategic ETH Reserve.
Market watchers expect more attention on BitMine soon. Rumors suggest Tom Lee might appear on The Joe Rogan Experience podcast.
Options activity in BMNR shows moderately bullish sentiment. Calls outpaced puts with a put-call ratio of 0.32.
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