BitMine Immersion Technologies, the world’s largest corporate holder of Ethereum (ETH), is currently facing unrealized losses of over $4 billion on its ETH holdings.
The company’s drawdown reflects growing turmoil among digital asset treasury (DAT) companies, raising new questions about the sustainability of this business model.
BitMine’s growing losses create a “Hotel California” scenario
In a recent disclosure released earlier this week, Bitmine revealed that it holds approximately 3.6 million ETH, which is approximately 2.97% of the Ethereum supply. The company is steadily approaching its long-held goal of accumulating 5% of all ETH.
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But the Treasury is feeling increasingly strained due to the sharp decline in asset prices. Ethereum has fallen 27.4% over the past month and is currently trading below $3,000. At the same time, BitMine’s balance sheet also reflects that decline.
According to the latest numbers, the company’s ETH stack is now worth just under $10 billion, leaving BitMine with about $4.18 billion in unrealized losses.
According to BitmineTracker data, the company’s underlying market-to-net asset value (mNAV) ratio is 0.73, while its diluted mNAV is 0.88. Research firm 10x Research highlighted the impact in a recent post on X (formerly Twitter).
The post highlights that changes in NAV tend to benefit long-term shareholders when the index rises, but can magnify losses when it falls, a pattern that many investors in digital asset vehicles still overlook.
“Treasury companies will face a harsh reality. Attracting new retail investors will be nearly impossible when existing shareholders are saddled with billions of dollars in losses. When premiums inevitably shrink to zero, as they currently do, investors find themselves trapped in a structure and unable to break out without significant damage. A very Hotel California scenario,” 10x Research wrote.
This distortion is also reflected in the company’s stock price performance. According to data from Google Finance, BMNR’s monthly decline was almost double that of ETH, with the stock dropping 49.8% over the same period.
This difference is not unique to BMNR. Several Bitcoin-oriented government bonds are showing the same pattern, with declines that exceed those of BTC itself.
However, BitMine is not alone in facing these challenges. Sharplink Gaming, the second-largest corporate holder of ETH, is facing unrealized losses of more than $500 million. He owns 859,853 ETH worth $2.4 billion at current market value. The company’s stock SBET has fallen 35.15% in the past month.
Nevertheless, on-chain data reveals that BitMine is still actively purchasing ETH. Earlier this month, the company purchased 110,288 ETH. OnchainLens also reported that it recently purchased 17,242 ETH worth $49.07 million from FalconX and BitGo.
