That’s the strategy BitMine Immersion Technologies is following.
The blockchain infrastructure company, which specializes in crypto mining and digital asset management and reported a net loss in the three months through May 31, surged 3,000% in the five trading days ending July 3 after raising $250 million to add Ethereum to its balance sheet.
BitMine sold more than 55 million shares to a group of crypto and venture investors at $4.50 apiece on June 30. The company plans to use the proceeds to buy ethereum as the company’s primary treasury reserve asset.
The company also appointed Tom Lee, managing partner and head of research at Fundstrat Global Advisors, as the Chairman of the Board of Directors.
The stock is up almost 1,600% year-to-date despite not being profitable. However, the Ethereum-inspired rally is proving to be volatile: the stock began falling after market open on Monday, dropping 25% from its Thursday close of $136.
The company is taking a page from Michael Saylor’s Strategy playbook by creating a crypto treasury reserve.
While many companies have mimicked Strategy by loading up on bitcoin, an Ethereum-focused treasury purchase plan is still rare.
While BitMine will continue to focus on its primarily bitcoin-dominated business operations, the company is betting that Ethereum will become more mainstream.
With stablecoins playing a growing role in the crypto ecosystem, BitMine is positioning itself as an early investor in the infrastructure behind them.
Unlike bitcoin, Ethereum allows programmable tokens, which are a key feature for the smart contracts that power stablecoins. Ethereum runs on “proof of stake,” which allows users to earn rewards by locking up their holdings to help validate transactions and secure the network. Bitcoin, on the other hand, still relies on “proof of work,” where miners use energy-intensive computers to solve cryptographic problems to mint new bitcoins.
Ethereum hosts over half of existing stablecoins, making the crypto critical to the stablecoin ecosystem.
According to the investment platform AInvest, 30% of Ethereum’s transaction fees are generated by stablecoins. US Treasury Secretary Scott Bessent predicts that the $250 billion stablecoin market could expand to over $2 trillion in the next three years, meaning that Ethereum is positioned to receive an outsized benefit from the industry’s growth, Tom Lee said.
