Bitmine Now Holds 4.59% of Ethereum Supply After Major ETH Buying Spree
Bitmine added nearly 127,000 ETH in a week, bringing its holdings to 5.54 million ETH, or 4.59% of Ethereum's total supply.
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What To Know
- Bitmine accumulated 126,971 ETH over the past week, bringing total holdings to 5.54 million ETH.
- The company’s ETH position now represents 4.59% of Ethereum’s total supply.
- More than 4.72 million ETH have been staked, generating yield and projected annual staking revenues.
- Bitmine continues to aggressively accumulate ETH despite broader market weakness and is approaching its stated goal of controlling 5% of Ethereum’s supply.
Bitmine, which started as an immersion-cooled Bitcoin mining firm but then recently pivoted to accumulating ETH, has disclosed a significant increase in its Ethereum holdings.
The firm added 126,971 ETH over the past week, bringing its total holdings to 5.54 million ETH. This is equivalent to 4.59% of Ethereum’s entire circulating supply.
The company’s total assets now include 204 BTC, cash reserves, and equity stakes in Beast Industries and Eightco Holdings, putting the overall portfolio value at approximately $9.6 billion.
Closing In on the 5% Target
Ever since it came under the leadership of Fundstrat‘s Thomas Lee, Bitmine has been open about its ambition to control 5% of Ethereum’s supply.
The firm refers to the goal as the “Alchemy of 5%,” and by its own count, the company is now 92% of the way there.
Notably, much of the recent buying took place during a period of broader market weakness for Ethereum. The activity could be considered a reflection of the firm’s conviction in Ethereum’s long-term trajectory rather than short-term price momentum.
Staking as a Revenue Engine
What sets Bitmine apart from Bitcoin treasury firms like Strategy is its ability to generate income from its holdings. Of its 5.54 million ETH, more than 4.72 million, which is over 85% of its holding, has been staked. The company reported a seven-day staking yield of 2.99%, and projects annualised staking revenues of approximately $230 million.
Bitcoin treasury companies depend almost entirely on asset appreciation. Ethereum treasury companies can layer yield onto that exposure. Thus, creating a business model less like a holding company and more like a revenue-generating operation.
Tom Lee’s Case for Ethereum
Chairman Tom Lee has been vocal about why Bitmine is doubling down despite market headwinds.
His argument centres on the expansion of artificial intelligence. Lee believes that this expansion brings increased demand for decentralised infrastructure. Lee views Ethereum as critical digital infrastructure, and characterises the current environment as the early phase of a “crypto spring.”
Funding the Next Wave of Purchases
To finance continued accumulation, Bitmine recently filed with the SEC to issue preferred shares carrying a 9.5% dividend.
The proceeds will go towards additional ETH purchases, validator infrastructure expansion, investments in the Ethereum ecosystem, and general working capital.
This is not unusual. Most crypto treasury companies use a similar formula, funding their digital asset strategies and plans with traditional capital market instruments.
A New Category of Institutional Crypto
Strategy also recently made a significant purchase of Bitcoin. The company bought 1,550 Bitcoin for over $100 million, strengthening its Bitcoin holdings.
This, along with Bitmine’s purchase, indicates a renewed wave of interest in crypto holdings among corporate institutions.
Bitmine’s rise and the 5% Target it set are signs that we could be witnessing the early formation of a distinct category of crypto treasury companies. It could be the start of Ethereum treasury companies that operate differently from the Bitcoin treasury model pioneered by firms like Strategy.
If the trend continues, institutional investors may eventually evaluate these firms using a different set of metrics.
While most investors now focus on how much crypto these treasury companies hold, that focus could soon shift. If Bitmine succeeds, it could shift the focus from just how much crypto they hold to how efficiently they convert those holdings into recurring staking income.
The first wave of institutional crypto adoption was about Bitcoin as a store of value. The second may be about Ethereum as a productive asset.
Whether Bitmine reaches its 5% target remains to be seen, although the company is getting closer to that goal. What happens if it does will be a closely watched test of that thesis.
