The chairman of BitMine Tom Lee responded to discussions about the loss of Ethereum of the firm, arguing that they are part of the project.
BitMine’s Ethereum Holdings Take Significant Losses After Crash
The digital asset sector saw a major bearish reversal last week and Ethereum was among the worst-hit assets, falling nearly 25%. The result of this decline was that BitMine, the largest shareholder of ETH, saw its reserves lose significantly.
BitMine is still relatively new to the cryptocurrency space, having only accepted Ethereum on its balance sheet in June of last year. Despite the short time the plan had to work, the company has already accumulated a significant amount of cryptocurrency. As of Monday’s press release, BitMine holds 4,285,125 ETH, which is equivalent to 3.55% of the total circulating assets.
However, since BitMine started buying right on the heels of the ETH bull rally, many of its tokens were bought at much higher levels than today. Market declines following price increases have already pushed the company’s stock into the red, and the recent price crash has made it even bigger.
Discussions related to BitMine’s more than $6 billion in mysterious Ethereum losses have begun to circulate on social media, with some users criticizing the treasury company. Chairman Thomas “Tom” Lee addressed the topic in X’s post, retweeting one such user.
Lee said the criticism “misses the point of the ethereum treasury,” explaining that BitMine is designed to track the price of ETH and succeed over the cycle. With the market in a bad state right now, he added, an inevitable loss in the company’s earnings should be expected at such times.
The chairman argued that this is not a bug, but rather a “feature.” He compared the firm’s situation to that of index exchange-traded funds (ETFs), saying, “Are we going to call all index ETFs their losses?”
Amidst this steep decline, BitMine has been making a push towards staking, quickly closing its supply of Ethereum staking contracts to generate revenue. To date, the company has deposited 2,897,459 ETH, which corresponds to approximately 67% of its assets.
The recent market decline has been so severe that even the long-term Strategy has seen its take-profit status threatened, as Bitcoin is currently trading close to its cost base. Strategy is the largest digital treasury company in the world with 713,502 BTC sitting in reserves, but these large reserves of $ 54.3 billion can go under water if the loss of the cryptocurrency loses $ 76,000.
Trading currency of ETH
Ethereum saw a drop from the lows of $2,100 on Tuesday, but the coin has since seen a bounce back to $2,250.
The trend in the price of the coin over the last five days | Source: ETHUSDT on TradingView
Featured image from Dall-E, chart from TradingView.com
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