BitMine’s Ethereum Bet Backfires: $6.6 Billion Paper Loss Shakes Crypto Giant

Another day, another paper loss in crypto—only this time, it's a $6.6 billion whopper.

BitMine, the mining and investment behemoth, just disclosed a staggering unrealized loss on its Ethereum holdings. The figure? A cool $6.6 billion. It's the kind of number that makes traditional finance guys spill their morning coffee—and then smugly remind you they 'just don't get crypto.'

From Digital Gold to Lead Balloon

The loss isn't realized—yet. It's a paper loss, meaning BitMine hasn't sold the assets. But the sheer scale highlights the extreme volatility even major players navigate. One quarter's strategic treasury allocation can become the next quarter's glaring red line on a balance sheet.

The HODL Gambit

This reveals the high-stakes game of 'HODL' at an institutional level. Companies like BitMine accumulate crypto not just for operations, but as a core part of their treasury strategy. When markets dip, the paper losses pile up, testing conviction and corporate nerve.

It's a stark reminder: in crypto, paper gains can vanish as fast as they appear. And sometimes, the most sophisticated players are just along for the same rollercoaster ride as everyone else—just with a few more zeroes on the screen.

BitMine went all-in on Ethereum and bought too high

BitMine wasn’t always this deep in. The company started out as a Bitcoin miner, but in June, it switched things up and decided to become an Ethereum treasury firm.

The plan? Buy up 6 million ETH, or about 5% of the total supply, and stake it to earn yield. It already holds 4.3 million Ethereum, and added 41,788 more tokens just a few days ago.

Tom Lee, BitMine’s chairman, went on CNBC this week and tried to stay calm. “All the pieces are in place for crypto to be bottoming right now,” he said on Squawk Box. Lee still thinks Ethereum has strong fundamentals and sees the $3.6 trillion crypto industry as solid long term. “If that’s the case, crypto prices should follow,” he said. But none of that changes the fact that they’re down over $6 billion on paper.

The company isn’t doing this alone. Big names like Cathie Wood, Peter Thiel’s Founders Fund, Galaxy Digital, and Kraken are backing BitMine. Doesn’t help much when the price tanks though. Ethereum is still down 53% from its August all-time high of $4,946. That’s the hole they’re in.

No leverage saved BitMine, but it didn’t help others

BitMine didn’t borrow money to buy Ethereum. That’s one thing going in their favor. A lot of these crypto treasury firms took on debt when prices were high.

Now they’re underwater, and they might not survive if prices stay low. Coinbase has already warned that some of them could blow up and hurt the rest of the market.

Lee blamed some of this recent drop on what he called a “lack of leverage” since the October 10 crash, plus the chaos in the precious metals market last Friday. He said BitMine sees this dip as a buying chance. Sure. But the numbers are what they are.

They’re not alone in the pressure cooker. Michael Saylor’s Strategy, the biggest bitcoin treasury company out there, is also watching Bitcoin drop below its average entry price for the first time since 2023. Unlike BitMine, Strategy uses leverage. That means if the price keeps falling, they might be forced to sell some of their Bitcoin.

Saylor, for his part, sounded confident when asked about it on Fox Business. “The company’s engineered to take an 80 to 90% drawdown and keep on ticking,” he said. “I think we’re pretty indestructible.”

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