Cryptocurrency mining giant Bitmine has sounded a stark warning after reporting a staggering $3.8 billion net loss for Q1 2026, driven primarily by a massive $3.78 billion markdown on its Ethereum holdings. The loss comes as ETH broke below its anticipated bull market range, trading between $2,000 and $2,500 during the quarter. Despite the historic quarterly loss, the company's report underscores Ethereum's long-term value proposition, with Bitmine aggressively adding 61,000 ETH in March—its largest purchase of the year—signaling a profound conviction in the asset's recovery and future potential.

What changed for Bitmine in Q1? 

Previously, Bitmine suggested the ETH bear market ended in Q4, as Cryptopolitan reported. The new result showed the drawdown continued, and Bitmine admitted in its latest 8-K filing that ETH was in a mini crypto winter.  

In the long term, Bitmine remains bullish, with a price target for ETH at $62,500. Yet Q1 also showed ongoing price weakness. 

Bitmine admitted that ETH is in a mini crypto winter, noting that, for the first time, ETH was in a bear market while equities rallied. Previously, every ETH crypto winter coincided with a stock market slowdown. Now, Ethereum will have to prove its value and point the way for the DAT companies as a whole. 

The latest report showed Bitmine’s intention to build during the crypto winter, in expectation of an eventual bull market. Bitmine is careful to note that ETH is not in a true bear market and has found support levels. However, the sideways trading and outflows of buyers and traders signal a period comparable to the previous crypto winter. 

Over the past three quarters, Bitmine has steadily expanded its treasury, from 625K ETH to over 4.6M, through regular weekly purchases. Currently, Bitmine holds 3.8% of the ETH supply, on track to buy up 5% and stake it to earn regular rewards. 

Bitmine holds ETH at an average price of $2,205, while the token traded at $2,324.42. In the past quarters, Bitmine did not immediately buy the dip, but acquired ETH at any possible moment through ongoing fundraising. 

Staking replaced mining for Bitmine

Bitmine’s Q1 results show a path for other DAT companies holding ETH or other staking assets. Bitmine phased out mining in 2025 and 2026, reducing its self-mining revenues by over 80%. 

In Q1, mining revenues fell to $219,000, replaced by $10.2M in staking revenues. Over time, staking may expand for Bitmine, securing regular ETH rewards. 

Despite regular staking rewards, Bitmine had to incur higher general and administrative expenses, reaching $75M in Q1. Expenses were just under $1M for Q1 2025, and have so far exceeded revenues. 

Bitmine is forging a path that will require it to cover compensation tied to previous equity raises. For now, the company has not offset its growing expenses, and the rest of the year will show the viability of its holding and staking strategy. Bitmine is indicative of the biggest problem for DAT companies: offsetting aggressive fundraising, debt, or stock dilution. 

Following the Q1 report, BMNR traded at $21.68, near its 2026 low. Despite the stock weakness, Bitmine believes the crypto market is close to its local lows, which often includes generally bearish sentiment. Bitmine noted that the Iran war exacerbated the bearish attitudes. 

The latest Bitmine report shows that DAT companies may take a while before becoming profitable with staking, and must show readiness to survive crypto winter periods. 

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