BitMine's Ethereum Holdings Under Scrutiny Amid Math Concerns
BitMine's Ethereum Holdings Under Investor Scrutiny
BitMine has unveiled a significant Ethereum treasury, amassing 3.63 million ETH. However, its claimed average acquisition price of $2,840 per ETH is drawing skepticism from industry analysts.
This revelation is noteworthy as BitMine inches closer to its ambitious target of owning 5% of the entire Ethereum supply, a milestone dubbed the 'Alchemy of 5%' by Fundstrat.
BitMine's $11.2 Billion Crypto and Cash Portfolio
In a recent update, BitMine (BMNR) reported $11.2 billion in total holdings, including 3,629,701 ETH, 192 BTC, a $38 million investment in Eightco Holdings, and $800 million in liquid cash.
BitMine claims the ETH was acquired at an average cost of $2,840 per token. With current prices exceeding $2,900, this position could be marginally profitable.
Chairman Thomas Lee highlighted that BitMine now holds 3% of Ethereum's total supply, moving closer to the 5% target.
Consistent ETH Accumulation
BitMine's aggressive ETH acquisition strategy is evident from its weekly purchase reports, showing substantial inflows during October and November.
| Week Ending | ETH Purchased |
|---|---|
| November 24 | 69,822 ETH |
| November 17 | 54,156 ETH |
| November 10 | 110,288 ETH |
| November 3 | 82,353 ETH |
| October 27 | 77,055 ETH |
| October 20 | 203,826 ETH |
| October 13 | 202,037 ETH |
| October 6 | 179,251 ETH |
These acquisitions position BitMine as the largest holder of Ethereum globally, second only to MicroStrategy in overall crypto holdings.
Investor Concerns Over Price Calculations
Despite these bullish figures, investors are questioning the reported average purchase price. Blockchain analytics suggest BitMine's actual average cost might be closer to $3,997 per ETH, implying a potential $4 billion unrealized loss.
Analysts argue that the $2,840 figure may reflect the ETH spot price at the time of disclosure, rather than an accurate average cost basis.
BitMine has yet to address these discrepancies or provide a detailed breakdown of its cost basis. The crypto community is keenly awaiting clarification as BitMine's strategy continues to impact the Ethereum market.