TL;DR
- BitMine buys $157 million ETH, now holds over 4% supply.
- Firm stakes 3.33 million ETH, earning $300 million annual rewards.
- BitMine targets 5% of Ethereum supply, calling it “alchemy of 5%.”
BitMine Immersion Technologies does not buy Ethereum in small chunks. The firm added 71,524 ETH last week, worth roughly $157 million at current prices. That purchase marks the company’s largest acquisition since December.
This brings BitMine’s total holdings to 4,874,858 ETH, more than $10.7 billion worth of the second-largest cryptocurrency. With the latest buy, BitMine now controls over 4% of the entire circulating supply of Ethereum. The firm marches toward its stated goal of 5%, a target it calls the “alchemy of 5%.”
Tom Lee, BitMine’s chairman, released a statement explaining the accelerated pace. “BitMine has maintained the increased pace of ETH buys in each of the past four weeks, as our base case ETH is in the final stages of the ‘mini-crypto winter,’” Lee said. The firm clearly sees current prices as a bargain. Ethereum trades around $2,208 on Monday, down more than 55% from its August all-time high of $4,946. BitMine’s own shares reflect the same pain: BMNR fell 63% over the last six months.
Yet the buying continues. BitMine added $38.5 million worth of ETH in the three weeks before the latest purchase, according to previous disclosures. The strategy appears simple: accumulate while prices stay depressed. But the scale raises uncomfortable questions. One entity now holds more than 4% of all Ethereum in circulation. No single company controls that much Bitcoin. No bank holds that large a share of any major liquid asset. BitMine is breaking new ground, and not everyone sees it as healthy.
BitMine does not just buy and hold
The firm currently stakes 3,334,637 ETH, worth about $7.3 billion. Staking means locking up the coins to help secure the Ethereum network in exchange for rewards. Lee projects that once BitMine stakes its entire hoard, the firm will earn more than $300 million annually in ETH rewards. That income stream, paid directly in more Ethereum, compounds the concentration problem. BitMine earns ETH, stakes that ETH, earns more ETH, and repeats the cycle.
The share buyback program adds another layer of financial engineering. BitMine recently uplisted to the NYSE from the smaller NYSE American exchange. Alongside the uplisting, the board approved a 300% boost to its buyback program, authorizing $4 billion for repurchasing BMNR shares.
Last July, the firm approved a $1 billion program. BitMine has not disclosed whether it used any of those funds to buy back shares. But the authorization signals confidence, or at least an attempt to prop up a stock that lost nearly two-thirds of its value.
Shares rose 1.7% on Monday to $21.64, roughly matching Ethereum’s own 24-hour gain. The correlation makes sense: BMNR trades as a leveraged play on ETH. If Ethereum recovers to its all-time high, BitMine’s treasury would be worth over $24 billion. If ETH falls further, the firm faces margin pressure on its staked positions and a falling stock price.
The risk extends beyond BitMine. A single entity holding 4% of Ethereum’s supply creates centralization pressure on a network designed to distribute control. Staking concentrates voting power on protocol upgrades. Large sales could crash the market. Lee and BitMine act like a corporate whale, rational and strategic from their perspective. But the health of Ethereum depends on no single actor becoming too big to fail. BitMine inches closer to that line every week. The “alchemy of 5%” sounds like a goal. It also sounds like a warning.
