BitMine Faces $6.6B Unrealized Ethereum Losses as ETH Price Declines
BitMine, the largest Ethereum Treasury company, is currently facing heavy paper losses as the ETH price continues to slide amid a broader crypto market downturn. The crypto-focused firm, chaired by Tom Lee, is reportedly sitting on more than $6.6 billion in unrealized losses tied to its huge Ether holdings.
This situation highlights how sharply the recent crypto market crash has hit major crypto players. With top assets like Bitcoin, Ethereum, and XRP facing severe plummets and trading at multi-month lows, both individual and institutional investors are experiencing major losses.
BitMine’s 4.2M Ethereum Bet Comes Under Pressure
The crypto market is currently bleeding, with Ethereum being one of the most affected cryptocurrencies. While the total market cap has fallen by 1.16% over the past 24 hours, reaching $2.62 trillion, top assets like Bitcoin, Ethereum, and XRP are exhibiting severe downfalls.
Ethereum, one of the largest losers, is trading at $2,306, marking significant declines of 3.5%, 20%, and 25% over the past day, week, and month, respectively. As a consequence, the total ETH holdings of BitMine have faced a severe unrealized loss of more than $6.6 billion.
In an X post earlier today, market expert Steve Burns stated,
“BitMine’s unrealized ETH losses rise to -$6.6 billion, now on track to become the 5th largest documented principal trading loss in history if sold. Unrealized losses are now at ~66% of the size of Archegos in 2021, the largest loss ever recorded.”
According to data from Dropstab, BitMine currently holds around $9.2 billion worth of Ether tokens. This portfolio is now down by more than 41% from its original investment of nearly $15.7 billion. While these losses haven’t been realized yet, their sheer size has drawn attention, especially as Ethereum trades near seven-month lows after a broad market sell-off wiped roughly $500 billion from the total market cap in recent days.
These losses also coincide with the massive liquidation event that swept through the crypto market. As per CoinGlass data, more than $800 million in crypto assets were wiped out over the past 24 hours. Ether saw a severe hit, with more than $485 million in long positions liquidated on January 31. Over the past 24 hours, about $306 million in ETH tokens were removed from major exchanges.
Experts Question BitMine’s ETH Strategy
The prevailing situation has drawn strong reactions on social media. On January 30, investor Karol Kozicki slammed what he addressed as overly optimistic price predictions, pointing to Tom Lee’s earlier forecasts of Bitcoin reaching $180,000 and Ethereum jumping to $9,000 by the end of January. With BTC now trading around $75k and ETH near $2.3k, Kozicki stated those projections no longer reflect current market conditions.
Another commentator, Shah, suggested that Ethereum would need to rise close to $7,000 for BitMine to exit its position without major losses. He also warned that selling such a large amount of ETH could push prices lower, highlighting concerns about liquidity and the difficulty large holders face when trying to exit positions during periods of market stress.
These experts question BitMine and Tom Lee’s Ethereum accumulation strategy. As CoinNewsSpan reported previously,BitMine continued its ETH accumulation strategy despite the broader crypto market crash.
The company, which previously saw its unrealized losses at around $4 billion, launched an Ethereum staking strategy, as reported by CoinNewsSpan. While ETH continued to decline, BitMine stood firm on its Ether accumulation and staking initiatives.
