Bitmine: A Most Peculiar Crypto Puzzle

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Now, Bitmine Immersion Technologies (BMNR 1.97%), until quite recently a name known to few outside the most dedicated circles of crypto enthusiasts, has presented a situation of the most diverting peculiarity. It was, you see, a Bitcoin (BTC 2.59%) mining operation, a perfectly respectable, if somewhat overlooked, concern. But then, in July, a most unexpected thing occurred – it decided to become, for all intents and purposes, a warehouse for Ethereum (ETH 1.69%). A dashedly clever bit of repositioning, one might say.

And buy Ethereum it did, with a gusto that would have impressed even the most ardent collector of antique spoons. To such an extent, in fact, that it now holds a staggering 3.5% of all Ethereum in circulation. The largest corporate hoard, if you please! A circumstance which, naturally, warrants a closer inspection by any investor of discerning taste.

Valuing a Digital Treasury, What Ho!

The question that now arises, rather like a particularly insistent houseguest, is whether the current price of $26 fairly reflects the company’s… assets. It’s a bit of a comedown from the heady days of summer, when it was trading at a considerably more robust $161. This gives Bitmine a market capitalization of roughly $12 billion, which, at first glance, appears perfectly… reasonable. Until, that is, one delves a little deeper.

For Bitmine, you see, currently possesses 4.24 million ETH on its balance sheet. At today’s prices, this amounts to a rather substantial $11.6 billion. A figure that rather tickles the imagination, doesn’t it? Assuming, of course, that they haven’t been indulging in any secret borrowing to fund their digital acquisitions – a most unseemly thought! – one can arrive at a rather startling conclusion.

Comparing the market cap to the value of the Ethereum holdings reveals a multiple of just 1.03. A figure so low it’s practically subterranean! It’s as if investors are saying, “We only care about the Ethereum, old boy. The rest of the company is, shall we say, surplus to requirements.” A most peculiar state of affairs, akin to valuing a chap solely on the contents of his wallet.

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One would expect, naturally, that a crypto treasury company of this sort would command a rather substantial premium. Bitmine, in a stroke of undeniable brilliance, even brought aboard Tom Lee of Fundstrat as chairman, hoping he could replicate the success Michael Saylor has had with Bitcoin. A most promising development, one would have thought. Alas, in 2026, the magic appears to have… evaporated. Bitmine continues to accumulate Ethereum, Mr. Lee continues to predict astronomical price increases, but the price of Ethereum remains stubbornly… unmoved. It’s currently trading at a 45% discount to its all-time high, a most disheartening spectacle.

Ethereum Itself, or the Treasury Holding It?

In the final analysis, I find myself inclined to purchase Ethereum directly, rather than a company that merely holds it. Investors are, after all, taking on additional risk without receiving adequate compensation. If Bitmine is to trade at the same value as its Ethereum holdings, why not simply cut out the middleman and acquire the Ethereum itself? A perfectly logical proposition, wouldn’t you agree?

This, perhaps, explains why Bitmine’s stock has been languishing in the doldrums of late. It appears the multiple is destined to converge towards 1, or even venture into negative territory. A most unappetizing prospect, to be sure.

For the time being, I shall avoid these new-fangled crypto treasury companies. They had their moment in the sun, but it’s now time to seek out more promising investment opportunities elsewhere. A bit like a well-bred gentleman abandoning a particularly tiresome social engagement. There are, after all, plenty of fish in the sea – or, in this case, plenty of cryptocurrencies in the market.

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2026-02-04 13:42