Tom Lee: BitMine's 5% ETH Stake Is Just the Start, $10K Target Ahead

Organized & compiled by: Shenchao TechFlow

Guest: Tom Lee (Chairman of BitMine Immersion Technologies, Co-founder and Head of Research at Fundstrat Global Advisors, CIO of Fundstrat Capital)

Host: David Hoffman (Bankless)

Podcast source: Bankless

Original video title: BitMine Is About to Own 5% of ETH | Tom Lee

Air date: Aug. 24, 2026

Conflict of Interest Disclosure: Tom Lee serves as chairman of BitMine Immersion Technologies (NYSE: BMNR), the world's largest ETH holder, with approximately 5.8476 million ETH as of Aug. 23, representing about 4.8% of total supply. Lee is also a personal investor in BitMine, and his Fundstrat Capital operates the GRNY ETF, with Fundstrat's core business model based on paid research subscriptions. Lee's personal wealth is highly tied to ETH prices, BMNR stock, and GRNY performance. All views on Ethereum and the crypto market in this episode align with his significant financial interests. Readers are advised to consider these interests.

Key Takeaways

• BitMine grew its ETH holdings from zero to approximately 5.82 million in 14 months, nearly 4.9% of total supply, just about 0.2% shy of the 5% target.
• All funded through equity, no debt, no convertible notes; Lee calls this "keeping the capital structure clean."
• Bought ETH every week for over 60 consecutive weeks, shifting to a mix of "ETH purchases + stock buybacks" in the last 5 weeks, dynamically adjusting based on capital returns.
• Likely won't stop after reaching 5%, provided institutions start treating ETH as a long-term asset; the real reassessment comes in 2027.
• BitMine doesn't sell ETH to cover expenses; annual staking yield of about $300 million easily covers the $30–35 million annual dividend on the 9.5% perpetual preferred stock (BMNP).
• Lee compares ETH to "the stock market/land," with its core attribute being a store of value, not a bond-like cash-flow asset.
• His price targets: ETH should exceed $5,000 in the new bull cycle; with Wall Street tokenization and AI demand, it could "easily" break $10,000 within 1–2 years.

Notable Quotes

• "ETH is a yield-bearing asset. BitMine has no need to sell any ETH due to financial pressure." — Tom Lee, on whether BitMine would sell ETH
• "If you treat the stock market as a cash-flow machine, the S&P 500 has risen about 10x over the past 15 years, with dividends contributing only 30%—the other 9.7x is unrelated to cash flow. The stock market is essentially a store of value." — Tom Lee, on whether ETH is a store of value or cash-flow asset
• Lee compares BMNP to a three-year at-the-money call option on ETH: the company pays a 9.5% annual dividend in exchange for the right to lock in more ETH at current prices; buying an equivalent call option in the market could cost nearly 100% in premiums. — Tom Lee, explaining the issuance of 9.5% perpetual preferred stock
• "The more AI develops, the more important crypto becomes. Crypto is a downstream beneficiary of AI." — Tom Lee, on the relationship between AI and crypto

Main Content

1. From Zero to Nearly 5% in 14 Months: What BitMine Did Right

On June 30, 2025, BitMine announced its transformation into an Ethereum treasury company with a goal of buying 5% of ETH supply. At the time, the two Bankless hosts privately thought "5% could never be bought." Fourteen months later, BitMine's holdings reached approximately 5.82 million ETH, nearly 4.9% of the 120.7 million total supply. Host David Hoffman opened the show by noting that in the digital asset treasury (DAT) space, this is one of the few cases that "not only avoided the graveyard but exceeded expectations."

Tom Lee attributes the success to three factors.

First, the messaging has always been simple and consistent. He told investors to keep the capital structure clean: all equity financing, no debt, no convertible notes. Second, positioning ETH purchases as "helping the Ethereum ecosystem"—the 5% target needed to be substantial but not become an over-centralizing force. Third, respecting investor intelligence by not hyping the stock week after week, but emphasizing a multi-year time frame. Lee quoted Michael Saylor: look at such companies on a four-year horizon, not weekly fluctuations.

More importantly, BitMine completed nearly every capital raise above net asset value (NAV, i.e., the value of holdings per share), and ETH holdings per share has grown more than 10x from the roughly $450 level at initial trading. This means early shareholders' ETH exposure per share has been significantly amplified, which is the core reason the stock has held above $450.

2. Buying for Over 60 Consecutive Weeks: Where Does the Money Come From?

Even more striking than the size of holdings is the buying discipline. BitMine has bought ETH every week since the transformation, for over 60 consecutive weeks. During the same period, Strategy (MSTR) paused Bitcoin purchases multiple times and even sold Bitcoin. Lee explained that they can keep buying because "each week we only do the thing with the highest return on capital."

In the last 5 weeks, BitMine's cash deployment has shifted to a mix of "ETH purchases + stock buybacks." Lee said that with a potential major ETH rally before year-end, the company is becoming more tactical: continuing to accumulate ETH while also buying back stock, because buybacks concentrate ETH per share.

There are three main sources of funding.

• Issuing common stock above NAV: This is the primary cash source, but used with restraint.
• Buying ETH at a discount: Lee revealed that over the past 14 months, most ETH was not purchased at spot prices but through structured arrangements at a discount, which is accretive to shareholders.
• Perpetual preferred stock BMNP: Issued in June with a 9.5% dividend, oversubscribed by more than five times, issued at $80 and trading around $91 at the time of the show. Lee likened it to "paying 9.5% annual interest to buy a three-year at-the-money call option on ETH," while equivalent option premiums in the market could be nearly 100%.

Staking yield itself is compounding. BitMine currently stakes over 5 million ETH through its self-operated Maven staking platform and partners. At an annualized staking yield of about 2.6% to 2.7%, that's roughly 120,000 new ETH per year. Lee did the math: they're about 200,000 ETH short of 5%, but staking alone "auto-produces" about 120,000 ETH annually, so they only need to buy about 80,000 more to hit the target.

3. What Happens After 5%: Three Possibilities, but Selling ETH Isn't High on the List

The market's biggest question: once BitMine reaches 5%, will the largest ETH buying machine stall?

Lee offered two directions. First, 5% may not be a hard cap. If companies start treating ETH as a long-term asset, it would be "completely reasonable" for BitMine to buy beyond 5%, but that question should be reassessed in 2027. Second, even if they stop at 5%, staking rewards will continue to grow the holdings naturally; at that point, BitMine might sell rewards to control the overall percentage, but would not sell due to financial pressure.

He reiterated that BitMine has no need to sell ETH. Annual staking yield is about $300 million, while the 9.5% perpetual preferred stock dividend burden is about $30–35 million per year—a very high coverage ratio. The company doesn't even convert these staking rewards into dollars or stablecoins. Rather than selling, Lee prefers to "find ways to monetize ETH assets," such as deploying the roughly 800,000 unstaked ETH into ecosystem-useful scenarios.

This leads to BitMine's second transformation: from a pure ETH treasury company to an Ethereum ecosystem company. The Maven staking platform, beyond managing BitMine's own ETH, has already attracted over $2 billion in external client assets. Lee calls it a "real cash-flow business" incubated within BitMine.

4. Funding EF Spin-offs: The Ecosystem Role BitMine Wants to Play

The Ethereum Foundation (EF) has been consolidating over the past year, spinning off some work into three new entities: the non-profit EthLabs, the for-profit EthSystems, and EthInstitutional. BitMine is the primary seed funder of all three.

Lee's explanation is that Ethereum has grown too large for a single organization to handle everything, just as the semiconductor industry doesn't rely on a single trade association. As permanent capital (no maturing debt, no redemption pressure), BitMine can provide a runway of three years or more, allowing these spin-offs to focus on execution without worrying about monthly fundraising. This is both a public good investment and a business consideration: BitMine wants Ethereum to capture as much of the future opportunities from tokenization and AI as possible.

5. What Kind of Asset Is ETH, Really?

David Hoffman asked Lee on the show: Is ETH a cash-flow asset or a store of value? Lee chose the latter, but reframed it.

He argued that categorizing the "stock market" simply as a cash-flow asset is wrong. Using the S&P 500 from 2009 to the present, total return rose about 10x, with dividends contributing only 30%—the other 9.7x came from capital appreciation. Investors buy stocks essentially because they believe companies can allocate capital better than they can themselves; the truly pure cash-flow asset is bonds. ETH is more like the stock market, and also like land: land can be rented out for cash flow, but long-term appreciation is what carries it through cycles.

He also addressed the skepticism that "institutions will use Ethereum for tokenization but don't need to hold large amounts of ETH." Lee believes this view is common bear-market rhetoric that will quickly disappear once ETH prices enter a new uptrend. He drew an analogy with the dollar: the dollar itself cannot be redeemed for gold from the government, yet it remains the global unit of transaction. Trying to explain asset prices with a single economic model often leads to absurd conclusions.

6. Lessons from Saylor and the "Call Option" Logic of BMNP

BitMine is often compared to Michael Saylor's Strategy. Lee's observation is that Strategy has been quite successful as a common stock story, but Saylor's later strategy became complex, adding leveraged structures like digital credit and volatility monetization. Lee believes these innovations need a longer time horizon to evaluate—"it may only become clear from now to 2032."

BitMine chose a different capitalization path: locking in dollar costs with 9.5% perpetual preferred stock while preserving upside for common shareholders. Lee calculated that if ETH rises to $5,000 or $10,000, staking yield will far exceed preferred dividends, giving common shareholders enormous leverage. He also hinted that if BitMine decides to buy well beyond 5% of ETH, they might expand BMNP; otherwise, the current preferred issuance is sufficient.

7. Cycles, AI, and ETH Price Targets

Lee believes the crypto market has bottomed. He said it's about 95% complete on a time basis and about 90% on a price basis. "Unless you're a genius, buying here is likely cheaper than waiting for the bottom to be confirmed."

He also agreed with David's point that "AI is sucking all the capital out of crypto," but added a key judgment: crypto is a downstream beneficiary of AI. The more mature AI becomes, the greater the demand for machine-to-machine transactions, on-chain settlement, and tokenized assets—which actually increases crypto's importance. This year's AI rally has made it hard for other assets to get attention, but that dynamic is changing.

As for price targets, Lee gave specific numbers:

• Just from entering a new crypto bull cycle, ETH should be above $5,000.
• If you layer on Wall Street tokenization and AI-driven demand, ETH "easily" exceeds $10,000 within 1–2 years.

He also made a rough shareholder return estimate: if ETH flips Bitcoin, corresponding to an ETH price of about $15,000, BitMine's stock could rise another 10x from current levels to around $4,500.

8. Conclusion

BitMine proved in 14 months that an Ethereum treasury strategy can scale without debt. For ordinary investors, the value of this episode isn't "how BitMine does it," but the framework Lee provides for judging ETH: Is it a store of value? Can staking yield cover capital costs? Will institutional demand for holding crypto really emerge in 2027?

It's also important to remember that Lee is one of the most obvious stakeholders in this game. His company holds nearly 5% of ETH, and he is deeply tied to its success. The $10,000 ETH path he describes sounds enticing, but whether it materializes still depends on macro cycles, regulatory progress, and whether Ethereum can truly convert the tokenization and AI narratives into on-chain demand.