Bitmine’s Ethereum strategy continues: buy in bulk again

At the same time that the crypto market is in ‘extreme fear’ according to the Fear and Greed Index, BitMine is opting for the opposite reaction. With a huge investment, the company significantly expanded their Ethereum (ETH) holdings last week. A striking choice, but BitMine seems to be firmly convinced that the major crypto coins have certainly not yet reached their peak.

54,000 ETH stocked up

The Bitcoin (BTC) miner and crypto reserve holder BitMine announced positive news in a press release on Monday. The company is said to have purchased as many as 54,000 Ethereum tokens in the past week. Even with the disappointing prices, we are still talking about a total value of more than 165 million dollars.

In total, BitMine already owns 3.6 million ETH, $607 million in cash reserves and a number of other cryptocurrencies, according to the report. As for Ethereum, they now own 2.9 percent of the total available supply of the coin. The miner’s goal is to eventually own 5 percent of the total supply.

Ethereum corrects 30% within one month

Although BitMine regularly expands its crypto holdings, the choice is striking to say the least. Ethereum has already fallen by almost 30 percent since its peak on October 27. In addition, it appears that the crypto market is particularly fearful, making a speedy recovery anything but certain.

But the company’s chairman, Thomas Lee, thinks he knows where the recent corrections are coming from. According to him, it all has to do with a sharp drop in liquidity. For example, trading platforms that have experienced financial consequences of the major crash.

Temporary recovery necessary, but ‘cycle top’ is still ahead of us

The chairman explains the situation more concretely as a “hole” in the balance sheet of a trading provider. This needs to be filled with capital and so the company starts looking for this. At the same time, they are also forced to reduce their liquidity contribution to the market. This happened earlier in 2022 and lasted about 6 to 8 weeks.

Although we are currently in an “intermediate phase”, according to Lee, the bear market has not yet started. BitMine believes that the crypto market has still not reached the top of the current cycle and therefore presents a unique opportunity for investors. Structural catalysts, such as companies building crypto reserves and financial institutions investing in the currency, could even push the top forward to 2026 or even later.