The aggressive Ethereum strategy of the listed BitMine Immersion is proving disastrous for the time being. Due to the recent decline in the crypto market, the company now faces more than $6 billion in paper losses on its Ethereum (ETH) holdings.
The timing of the purchases puts renewed pressure on the entire balance sheet strategy.
BitMine bought heavily just before the Ethereum price fell
BitMine significantly increased its Ethereum supply last week by adding more than 40,000 ether to its balance sheet. According to blockchain data from Dropstab, the company now owns approximately 4.24 million ETH.
Shortly after the purchase, market sentiment changed. The Ethereum price fell sharply, which severely undermined the total value of BitMine’s crypto reserve. While ETH holdings were worth almost $14 billion in October, only about $9.6 billion now remains. The company is therefore looking at a paper loss of more than six billion dollars.
Ethereum price under pressure due to liquidations and sales wave
On Saturday, Ethereum plummeted to just above $2,300. The entire crypto market faced increased selling pressure. Not only spot sales, but also massive liquidations on derivatives platforms are putting pressure on the market.
These types of moves show the risk of large crypto reserves on corporate balance sheets. What appears to be a strategic advantage in times of growth actually acts as a downward lever during major corrections. In a market with declining liquidity, this can have disastrous consequences for the stock market value and balance sheet position.
Tom Lee: ‘Unrest lasts longer’
Top strategist Tom Lee has been increasingly cautious about the short term in recent weeks. Despite his long-term optimism, he warns that the crypto market is still in the middle of a deleveraging phase. This means that positions are reduced and risks are avoided.
According to Lee, investors can prepare for a potentially turbulent start to 2026. He referred to the October crash in which $ 19 billion of market value evaporated in a short time. That move led to a repositioning of capital across the crypto sector.
Strike income does not outweigh decline
BitMine previously reported that some of the Ethereum supply is being deployed for staking. The company expects to generate approximately $164 million in annual revenue from this. However, those returns depend heavily on network fees, which decline during market corrections.
In the current situation, these incomes do not outweigh the enormous decline in the underlying asset. This raises the question of whether BitMine’s Ethereum strategy is sustainable in the long term in a volatile market.
Source: https://newsbit.nl/crypto-bedrijf-bitmine-verliest-6-miljard-dollar-door-instortende-ethereum-koers/
