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BitMine’s stock drops 27% despite optimistic projections for Ethereum’s value reaching $60K
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BitMine holds 600,000 ETH, worth over $2.2 billion, as part of its long-term plan to control 5% of the total Ether supply
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Increasing institutional interest in Ethereum treasuries, like BitMine’s, is seen as a positive driver for Ether’s price and long-term inflows
Ethereum treasury company BitMine Immersion Technologies saw its stock drop nearly 27% despite a series of positive projections about Ethereum’s long-term potential.
On Monday, the company launched its “Chairman’s Message” series, which aimed to provide insights into BitMine’s broader crypto strategy. During the presentation, Tom Lee from FundStrat discussed BitMine’s long-term Ethereum strategy, including their goal of holding 5% of the total Ether supply and projections that Ether’s implied value could eventually reach $60,000. The message was backed by slides that cited research firms (unnamed) in support of the Ether valuation.
However, the announcements did little to reassure investors. Despite the optimistic outlook, BitMine (BMNR) shares fell 27%, with an 11% drop during the regular trading day followed by another 15% decline in after-hours trading. This was in stark contrast to its earlier stock movement when BitMine’s announcement to buy Ether had led to a 3,000% surge, driving its stock to a yearly high of $135 in early July.
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BitMine’s Ethereum holdings and future plans
During the presentation, Lee confirmed that BitMine currently holds 600,000 Ether (ETH), worth over $2.2 billion at current prices. Lee emphasized the company’s ambition to become a fully “Made in America” validator network, focusing on geographic operations solely within the United States. BitMine’s long-term goal is to stake 5% of the total Ether supply, a plan that has generated significant attention in the crypto community.
Lee also mentioned that the company intends to play a significant role in the Ethereum ecosystem, strengthening its participation within the blockchain network. Despite the recent downturn in stock price, BitMine maintains its commitment to this strategy, aiming to become a key player in the Ethereum space.
Mixed reactions to Ether treasuries and corporate involvement
The conversation around Ether treasuries has sparked both optimism and skepticism. David Grider, a partner at Finality Capital, expressed that the Ether treasury company boom could have a positive impact on Ethereum’s price and market flows, similar to the influence that MicroStrategy has had on Bitcoin. He suggested that BitMine’s growing Ether treasury could prove beneficial for both the company and the cryptocurrency’s broader market.
Other companies have followed a similar strategy of accumulating significant amounts of Ether for their corporate treasuries, including SharpLink Gaming, which holds 438,000 Ether, and Bit Digital, with more than 100,000 ETH. Blockchain Technology Consensus Solutions has also ramped up its holdings, increasing its Ether stash to 29,122 ETH after a $62.4 million raise.
Challenges in treasury rollouts and market adoption
Despite the positive outlook from some investors, others remain cautious about treasury rollouts. Vincent Liu, the CIO at Kronos Research, recently highlighted that treasury strategies must be well-executed to protect capital and ensure liquidity. Without clear execution and long-term planning, such strategies are unlikely to deliver sustained value.
Ray Youssef, CEO of finance app NoOnes, also weighed in, stating that Ethereum is seen as a critical infrastructure component by corporate entities, which is driving an increase in corporate treasuries focusing on Ether. This growing institutional interest is seen as one of the main drivers for Ethereum’s increased use and price potential in the coming years.
