Ethereum’s Drop Below $2,000 Leaves BitMine Facing Nearly $8 Billion In Paper Losses

• BitMine recorded nearly $8 billion in unrealized losses after ETH fell below $2,000 on Thursday.
• Tom Lee told CNBC that BitMine has no plan to liquidate, cited ETH’s 40% drop in 10 days, and said past 60%+ drawdowns have been followed by V-shaped recoveries
• Lee pointed to Ethereum activity metrics, including 117% higher active addresses and 80% higher network usage over six months.

BitMine Immersion Technologies (BMNR), the world’s largest Ethereum-focused treasury company, suffered nearly $8 billion in unrealized losses after Ethereum (ETH) fell below $2,000 on Thursday.

According to reports, the firm gained about 4.29 million ETH, and DropsTab estimates the position was built at roughly $16.4 billion. At Thursday’s sub-$2,000 ETH prices, that stash was worth about $8.4 billion, leaving BitMine with billions in unrealized losses. 

Despite the sharp decline, BitMine will not be liquidating its assets. Lee told CNBC on Friday that “we have no leverage, no debt,” and said Ethereum was down about 40% over the last 10 days. He said ETH has had seven drawdowns of 60% or more in the last eight years and said those episodes were followed by “V-shaped recoveries.”

BitMine Immersion (BMNR) shares also fell sharply in recent sessions as Ethereum slid below $2,000, with investors tracking the mark-to-market value of BitMine’s ETH holdings. BMNR was trading at $20.69, up by 1.07% during after hours. The stock closed at $20.47 on Friday. On Stocktwits, retail sentiment around BMNR remained in 'bearish' territory, and chatter remained at 'high' levels over the past day.

A Death Spiral?

When asked about a potential “death spiral” scenario for crypto, Lee said the data on Ethereum usage did not support that, pointing to active addresses “up 117% year over year.” He added that network usage was “up about 80%” over the last six months. Referencing Wall Street tokenization activity, Lee cited firms including UBS, Standard Chartered, and Fidelity, saying institutions are “tokenizing products on Ethereum,” and said utility measures were rising even as prices fell.

Lee also outlined BitMine’s balance sheet, saying the company holds about 4.3 million ETH that earned roughly 3% annually. He added BitMine had roughly $600 million in cash earning about 4% in money markets, and said it generated about “$1 million a day” in net income, or roughly $60 million a year.

Ethereum (ETH) was trading at $2,028, up by 7% over 24 hours. On Stockwits, the retail sentiment around ETH remained in the ‘neutral’ territory, as chatter levels around it remained ‘extremely high’ over the past day.

Treasury-Style Crypto Balance Sheets Back In Focus

Lee linked the broader market mood to recent volatility in crypto-linked public companies, pointing to Strategy as a key example. The comments came as BitMine disclosed unrealized losses on its ether holdings, a day after Strategy reported a sharply wider quarterly loss tied to Bitcoin’s downturn.

Strategy (MSTR) posted a $12.4 billion loss for the quarter, compared with about $670.8 million a year earlier, as Bitcoin prices fell during the period.

Read also: Ark Invest’s Cathie Wood Flags 3 Reasons Behind The Market Crash

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