Bitmine struggles to sustain a $1.3 billion unrealized loss—will Tom Lee's high-stakes Ethereum gamble end in complete failure?

Bitmine, which purchased 3.4 million Ethereum at an average price of $3,909, is now facing an unrealized loss of over $1.3 billion. Its market capitalization to net asset value ratio has plummeted from 5.6 in July to 1.2. This article is based on a piece by Sidhartha Shukla, compiled, translated, and written by ForesightNews.

(Background context: Vitalik’s new article discusses low-risk DeFi on Ethereum, likening it to Google Search.)
(Additional background: Ethereum “powered by love”: developer salaries are only half of industry norms, possibly driven by a sense of mission.)

Ethereum’s corporate treasury experiment is rapidly unraveling. The second-largest cryptocurrency globally fell below $3,300 on Tuesday, declining in tandem with Bitcoin and tech stocks. This drop has caused Ethereum’s price to retreat 30% from its August peak, returning to levels seen before large-scale corporate holdings, further cementing its entry into a bear market.

According to data from research firm 10x Research, this reversal has left Bitmine Immersion Technologies Inc., one of Ethereum’s most aggressive corporate supporters, with an unrealized loss exceeding $1.3 billion. The publicly traded company is backed by billionaire Peter Thiel and led by Wall Street forecaster Tom Lee. Its strategy mimics Michael Saylor’s Bitcoin treasury model, acquiring 3.4 million Ethereum at an average price of $3,909. Now, Bitmine’s entire reserve has been deployed, facing mounting pressure.

10x Research stated in its report: “For months, Bitmine has been leading market narratives and capital flows. Now, its funds are fully invested, with unrealized losses surpassing $1.3 billion, and no additional capital available.”

The report also notes that retail investors who bought Bitmine shares at a premium over net asset value (NAV) are suffering even greater losses, and the market’s willingness to “catch falling knives” is limited. Tom Lee did not respond to requests for comment, and Bitmine’s representatives also did not reply immediately.

The grand vision behind the corporate treasury experiment
Bitmine’s gamble is more than just a balance sheet play. Behind its increased holdings is a broader vision: transforming digital assets from speculative tools into foundational infrastructure for enterprise finance, thereby strengthening Ethereum’s position in mainstream finance. Supporters believe that integrating Ethereum into corporate treasuries will help build a new decentralized economy—where code replaces contracts, and tokens serve as assets.

This logic fueled the summer rally, with Ethereum’s price approaching $5,000. In July and August, Ethereum ETFs attracted over $9 billion in capital inflows. However, since the crypto market crash on October 10, the situation has reversed: according to data from Coinglass and Bloomberg, Ethereum ETF outflows have reached $850 million, and open interest in Ethereum futures has decreased by $16 billion. Tom Lee previously predicted Ethereum would hit $16,000 by the end of this year.

The decline in Bitmine’s net asset value (mNAV) premium
Market re-evaluates crypto asset balance sheets
According to Artemis data, Bitmine’s market cap-to-NAV multiple has fallen sharply from 5.6 in July to 1.2, with its stock price down 70% from its peak. Similar to previous Bitcoin-related companies, Bitmine’s stock now more closely reflects its underlying holdings, indicating a market reassessment of the overestimated valuations of crypto balance sheets.

Last week, another publicly traded Ethereum treasury company, ETHZilla, sold $40 million worth of Ethereum holdings to buy back shares, aiming to restore its mNAV ratio. In a press release, ETHZilla stated: “We plan to use the proceeds from the remaining Ethereum sales for further share buybacks and will continue selling Ethereum to buy back shares until the discount to NAV normalizes.”

Despite the price decline, Ethereum’s long-term fundamentals remain strong: its on-chain value processed still surpasses that of all competing smart contract networks, and its staking mechanism endows the token with both yield and deflationary properties. However, as competitors like Solana gain momentum, ETF capital flows reverse, and retail interest wanes, the narrative that “corporate entities can stabilize crypto prices” is gradually losing credibility.

Related reports:

• Vitalik responds to Ethereum staking withdrawal congestion: delays are for blockchain security, with room for user experience improvements
• Ethereum Foundation launches “dAI team”: aiming to make Ethereum the preferred settlement and coordination layer for AI and machine economies

<Bitmine’s $1.3 billion paper loss, Tom Lee’s Ethereum gamble collapsing?>
This article was first published by BlockTempo, a leading blockchain news media outlet.