Bitmine's stock price surges again. What are the risks?

After Bitmine, a US-listed company, announced its purchase of Ethereum for its treasury reserves on June 30, 2025, its stock price (BMNR) skyrocketed 37-fold, reaching a peak of $161. The stock price subsequently retreated, remaining in the $30s for a month. It has recently rebounded, reaching a high of $69 on August 11. Currently, Bitmine has become the largest institutional holder of Ethereum through its continued purchases, with a cumulative holding of 1.15 million. Compared to other Ethereum "micro-strategies," Bitmine boasts a stronger Wall Street background. Public information shows that ARK Invest, where Cathie Wood works, and Founders Fund are both shareholders. Renowned Wall Street analyst Tom Lee is the company's chairman. Since taking office, he has driven the company's transformation from a traditional Bitcoin mining company to a core Ethereum reserve asset platform. With its capital strength, management team, and strategic positioning, Bitmine has distinguished itself from other Ethereum "micro-strategies" and secured its position as the industry's leading player. Bitmine's Rise in the Ethereum Ecosystem and Wall Street Support In recent years, with the rapid expansion of the Ethereum ecosystem, more and more institutions have begun to include ETH in their core asset allocations. Bitmine, a company that successfully transitioned from a traditional Bitcoin mining operation, has rapidly become one of the largest institutional holders of Ethereum through its continued purchases of ETH. According to the latest public data, Bitmine holds a staggering 1.15 million ETH. This continued buying spree has made its voice in the Ethereum ecosystem increasingly influential. Another person who cannot be overlooked is Chairman Tom Lee. He has not only played a key role in driving the company's transformation from a pure mining operation to a core Ethereum reserve asset platform, but has also instilled confidence in the entire crypto market. His active and proactive outbound calls have undoubtedly played a crucial role in this recent surge in Ethereum's price. Bitmine's uniqueness is also reflected in its background in Wall Street and US venture capital. Well-known investment institutions Ark Ventures and Founders Fund are both shareholders. In particular, the endorsement of Bitmine by Ark Ventures, led by Cathie Wood, demonstrates the confidence of traditional financial giants in Ethereum. Cathie Wood entered both Ethereum and Bitmine at the urging of Tom Lee. Compared to other Ethereum "microstrategies," Bitmine has gradually stood out thanks to its strong capital backing, professional management team, and clear strategic positioning, and has now firmly established itself as the leading Ethereum "microstrategy." The recent surge in BMNR's stock price coincided with Ethereum breaking through $4,000, a moment of euphoric market sentiment. Both ETH and BMNR have surged. According to an analysis by cryptocurrency influencer @_FORAB, Tom Lee is of Korean descent. Currently, ETH and BMNR are equivalent to Luna in South Korea. Both ETH and BMNR have sparked a wave of investment among Korean investors. Currently, Upbit, South Korea's largest cryptocurrency exchange, boasts ETH's daily trading volume far exceeding BTC by approximately 70%. According to data from the Korea Securities Depository and Clearing Corporation, Korean retail investors have net bought $259 million worth of BMNR stock since the beginning of July, making it the largest foreign security purchased during that period. On August 11th, BMNR reached an all-time high of $9.272 billion in trading volume, reaching 7th place in the US. This volume also exceeded its market capitalization, with a turnover rate of 142.54%. Potential Risks of Continuously Issuing Shares to Purchase ETH Bitmine currently holds 1.15 million Ethereum, currently valued at nearly $5 billion. Where did this Ethereum come from? According to public information, BitMine primarily raised funds to purchase Ethereum through private placements and issuing additional shares on the market. At the end of June 2025, BitMine signed a private placement agreement to purchase and sell 55,555,556 common shares at $4.50 per share, raising $250 million to purchase ETH. According to news on July 24th, the company increased its ATM program (a more flexible method of issuing additional shares to the market) from $2 billion to $4.5 billion. This means it can raise up to $4.5 billion through this flexible issuance method in the future, with the funds clearly stated to be used to increase its ETH holdings and expand its asset reserves. ATM issuances allow for flexible adjustments to the fundraising process based on market conditions, eliminating the need to issue a large number of shares all at once to depress the stock price. At the end of July, it also announced a $1 billion share repurchase program. This essentially involves using company funds to buy back its own shares from the market, with the funds ultimately flowing to shareholders who sold them. Its core purpose is to boost its stock price and increase shareholder confidence. The advantage of this continuous issuance of shares to raise funds for ETH purchases is that it can leverage investor funds in the secondary market and quickly establish an industry-leading position in the ETH reserve. Furthermore, this method is inherently leveraged, unlike traditional crypto companies that rely solely on their own profits to purchase coins, or MicroStrategy's method of purchasing BTC through convertible bonds.

From a risk perspective, this approach won't increase the company's debt burden, but it will dilute existing shareholders' holdings. Furthermore, if the stock price weakens due to a market downturn or ETH price fluctuations, the company's ability to raise funds through additional issuance will be significantly reduced. Essentially, the coin price and stock price are highly tied, posing a higher risk.