BitMine Buys ETH Dip Despite $6.9B Loss, Sees Strong Fundamentals

The recent sell-off in Ethereum (ETH) has been severe, with the asset losing more than a quarter of its value in just four weeks. This decline intensified over a recent weekend, driving prices from approximately $2,900 to a low near $2,100 before a slight stabilization. However, Tom Lee, head of research at Fundstrat and Chairman of BitMine, contends this price action is misleading. He attributes the weakness not to deteriorating Ethereum fundamentals but to external market factors: a notable absence of leverage in the crypto markets and a concurrent rally in precious metals like gold.

Lee’s stance is rooted in on-chain data that shows Ethereum’s underlying network health remains robust, even as its token price faltered. He pointed to Ethereum daily transactions reaching an all-time high of 2.5 million and active addresses climbing to a record 1 million per day. “In our view, the price of ETH is not reflective of the high utility of ETH and its role as the future of finance,” Lee stated, drawing a contrast with past crypto downturns where network activity declined in tandem with price.

Acting on this conviction, BitMine has executed a consistent buying spree. According to Lee, the firm acquired 41,788 ETH in the most recent week alone, continuing a pattern of sizable weekly purchases throughout January. He described current price levels as “attractive” given what he sees as strengthening network fundamentals. This accumulation comes despite reports estimating that BitMine is sitting on over $6.9 billion in unrealized losses on its Ethereum holdings, highlighting a high-conviction, long-term strategy.

The scale of BitMine’s position is substantial. As of February 2, the company reported total crypto and investment assets of $10.7 billion. This portfolio includes 4,285,125 ETH, 193 Bitcoin (BTC), a $200 million stake in Beast Industries, a $19 million stake in Eightco Holdings, and $586 million in cash. The firm’s balance sheet comprises approximately $10.1 billion in crypto and investments, with its Ethereum holdings generating staking rewards at a Composite Ethereum Staking Rate of 2.81%.

A key pillar of BitMine’s strategy is its debt-free financial structure. The company reported no outstanding debt, which Lee said allows it to withstand crypto market volatility without pressure to sell assets. “There is no pressure to sell ETH given the absence of debt covenants or related restrictions,” he explained. This financial cushion is bolstered by $586 million in cash earning money market yields of roughly 3.5% to 3.9%, providing operational stability and recurring income alongside staking rewards.

BitMine is also rapidly expanding its staking operations, which lock up ETH to secure the network and generate yield. As of February 1, the firm had staked 2,897,459 ETH, worth approximately $6.7 billion. This represents a significant increase of 888,192 ETH over the prior week and a major ramp-up from the 408,627 ETH staked at the end of December 2024. The company is currently working with three staking providers as it prepares to launch its own commercial MAVAN validator network in 2026, signaling a deeper, infrastructure-level commitment to the Ethereum ecosystem.