Tom Lee’s $1.3B Ethereum Position Faces Heat as ETH Extends Losses and Whales Flee

Fundstrat's Tom Lee finds his massive Ethereum bet under siege as the cryptocurrency continues its downward spiral.

Whales Make Their Exit

Major holders are dumping positions while ETH extends its decline—creating a perfect storm for Lee's $1.3 billion position. The timing couldn't be worse as institutional confidence wavers.

Pressure Mounts

With whales exiting and the broader market showing weakness, Lee's conviction faces its toughest test yet. The $1.3 billion stake represents one of the most watched positions in crypto.

Another day, another 'smart money' bet getting squeezed by market reality—because what's a billion-dollar position between friends when the whales are heading for the exits?

Ethereum’s Price Drop and Bitmine’s Mounting Losses

Ethereum has fallen over 20% in two days, sliding below $3,300 and erasing more than $1 billion in Leveraged positions. The correction has pushed ETH down about 30% from its August peak, marking its weakest level since mid-July.

According to 10x Research, Lee’s company, Bitmine Immersion Technologies Inc., which acquired 3.4 million ETH at an average price of $3,909, now faces paper losses exceeding $1.3 billion.

Backed by billionaire Peter Thiel, Bitmine adopted a Bitcoin-style corporate treasury model, but its funds are now “fully invested and under strain,” leaving little room for defensive moves.

Bitmine’s market capitalization-to-NAV ratio has plunged from 5.6 in July to 1.2, while its stock has tumbled 70% from its peak, reflecting a sharp reassessment of crypto-treasury valuations.

Another Ethereum-holding firm, ETHZilla, has already liquidated $40 million worth of ETH to restore its balance sheet, signaling growing corporate capitulation across the sector.

Whales Retreat as Liquidations Rise

On-chain data from Arkham Intelligence indicates that a large ethereum whale recently offloaded 5,570 ETH ($19.56 million) to Binance, resulting in a loss of $2.15 million. This move amplified selling pressure amid weak liquidity. ETH’s market cap has now dropped to around $400 billion, with the token down 17% weekly.

Technical indicators paint a cautious picture. ETH has fallen below its 50-day moving average ($4,094), with the RSI NEAR 31, suggesting near-oversold conditions but no confirmed reversal. Analysts warn that failure to hold the $3,300 support could trigger a deeper correction toward $3,000–$2,700 zones.

Institutional Demand Fades, but Fundamentals Remain Intact

After attracting over $9 billion in ETF inflows during the summer rally, Ethereum products have since seen $850 million in outflows, while futures open interest has dropped by $16 billion. Retail enthusiasm has also waned, with Google search interest for Ethereum now just 13% of its yearly peak.

Despite the downturn, Ethereum’s network fundamentals remain strong. It continues to process the highest on-chain value among smart contract platforms, and Vitalik Buterin’s proposed Layer-2 upgrade aims to cut rollup withdrawal times to one or two days, potentially boosting adoption.

Related Reading: Top crypto exchange Expands To Latin America With Argentina And Brazil Market Entry

However, for now, Lee’s high-stakes Ethereum wager stands as a cautionary tale of over-leveraged Optimism colliding with a cooling market, leaving investors to wonder whether Bitmine’s billion-dollar loss marks the start, or the bottom, of Ethereum’s latest cycle.

Cover image from ChatGPT, ETHUSD chart from Tradingview