BitMine aggressively buys 100,000 Ethereum, still claiming to buy despite a paper loss of 3 billion

Ethereum Asset Management Firm BitMine Immersion Expanded Its Digital Asset Reserves Last Week, Acquiring 102,259 ETH Since the Last Update. This acquisition increased the company’s Ethereum holdings to 39.6 million, valued at approximately $11.82 billion, aiming to hold 5% of the circulating supply of Ethereum.

BitMine’s “5% Alchemy” Strategy and the $30 Billion Loss Paradox

Since the last update, BitMine Immersion has purchased 102,259 ETH. This large-scale accumulation occurred amid weak Ethereum prices, demonstrating the company’s strong conviction in long-term value. Currently holding 39.6 million ETH solidifies BitMine’s position as the second-largest crypto treasury after Strategy, and leads in the Ethereum treasury space ahead of SharpLink Gaming. Chairman Thomas Lee describes the company’s strategy as “5% alchemy,” targeting 5% of Ethereum’s circulating supply.

This goal is highly ambitious. With Ethereum’s current circulating supply around 120 million, 5% equals 6 million ETH. BitMine currently holds 3.96 million ETH, needing to acquire about 2.04 million more. At the current price of approximately $2,980, this would require an additional investment of about $6.08 billion. Including the existing holdings valued at $11.82 billion, BitMine’s total investment commitment would reach nearly $18 billion. Such a scale of allocation makes BitMine one of the largest institutional buyers in the Ethereum ecosystem.

However, the reality is harsh. According to data compiled by CryptoQuant community manager Maartunn, BitMine still faces an unrealized loss of about $3 billion. This means the company’s average cost basis is significantly higher than the current market price. Simple calculations show that if 39.6 million ETH are at a $3 billion loss, the average cost per ETH is about $3,740, while the current price is only $2,980. This “buy more, lose more” situation is known in investing as a “cost averaging trap.” If prices continue to decline, losses will further expand.

BitMine Ethereum Holdings Overview

Total holdings: 39.6 million ETH, valued at about $11.82 billion, second-largest crypto treasury

Latest purchase: 102,259 ETH, indicating contrarian accumulation during price weakness

Strategic goal: Hold 5% circulating supply (~6 million ETH), need to buy 2.04 million more

Loss status: Unrealized loss of about $3 billion, average cost around $3,740 vs current $2,980

Stock performance: Down 9% on Monday, reflecting market concern over ongoing losses

Ethereum Dives 5%, Technical Breakdown

(Source: Trading View)

Ethereum’s price plummeted 5% on Monday, facing strong resistance as it attempted to retake the $3,100 level, now approaching support at $2,850. According to Coinglass data, Ethereum experienced $174 million in liquidations over the past 24 hours, with long liquidations totaling $141.8 million. This scale of liquidation indicates a large amount of leveraged longs being forcibly closed during the price decline, further intensifying selling pressure.

Technical indicators are extremely bearish. The Relative Strength Index (RSI) has fallen below the neutral 50 level, currently in a bearish zone. The Stochastic Oscillator is approaching oversold territory; if it dips further into oversold, it could trigger a short-term technical reversal, but given the current downward momentum, such a rebound may be fleeting. ETH needs to recover above $3,100 and break through the 50, 100, and 200-day exponential moving averages (EMA) to regain an upward trend.

The current price structure shows Ethereum at a critical support test. The next key support is at $2,850, which has historically provided effective support multiple times. If ETH fails to bounce near this level, it could fall to around $2,600. Deeper support lies at approximately $2,380, representing about 20% additional decline from current levels. This continuous support testing reflects persistent weakness in buying strength.

Notably, Ethereum’s performance remains weaker than Bitcoin. While Bitcoin consolidates near $100,000, Ethereum has broken below the psychological $3,000 level. This relative weakness reflects market concerns about Ethereum’s fundamentals, including Layer-2 sharding transaction volume, declining gas fee revenue, and fierce competition from high-performance chains like Solana. Against this backdrop, BitMine’s contrarian accumulation appears particularly isolated.

Contrarian Investing or Catching a Falling Knife?

BitMine has increased its holdings significantly as Ethereum’s price continues to decline. This behavior can be interpreted in two ways. The optimistic view is a contrarian investment strategy: when the market panics and sells off, confident long-term investors accumulate positions. Thomas Lee emphasizes “faith in the future development of cryptocurrencies,” indicating the company views current prices as a good entry point rather than a warning of risk. If Ethereum indeed surges substantially in the coming years as BitMine expects, the current $3 billion loss could turn into substantial profit.

The pessimistic view is “catching a falling knife.” Continuously adding to assets in a downtrend can lead to a vicious cycle of losses. Currently, BitMine has a $3 billion loss; if ETH continues to fall to $2,600 or even $2,380, losses could expand to $4 billion or $5 billion. For an asset management firm, such massive unrealized losses could severely impact financial health and shareholder confidence. Monday’s 9% stock decline directly reflects market concern over this risk.

BitMine also holds 193 BTC, valued at $38 million in Worldcoin (WLD) treasury shares, Eightco Holdings shares, and a total of $1 billion in cash. The $1 billion cash reserve provides some financial buffer, enabling the company to continue accumulating during further ETH declines. However, this strategy carries risks: if Ethereum remains in a prolonged bear market, continued investment could deplete all cash reserves, risking liquidity crises.

BitMine’s case offers important lessons for crypto investing. Strong long-term conviction can generate enormous wealth but also lead to catastrophic losses. The key is judgment: is Ethereum’s current weakness a cyclical adjustment or a structural decline? If cyclical, BitMine’s contrarian accumulation may prove wise. If structural, the $3 billion loss is just the beginning. For ordinary investors, unless equipped with similar capital strength and long-term vision, blindly bottom-fishing in a clear downtrend is extremely risky. Setting clear stop-loss levels and waiting for trend reversal signals are more rational than guessing bottoms.