Bitmine Posts -49% Returns Amid Ethereum Plunge; Is Its Financial Structure Sustainable?

▲ BitMine (BMNR), Ethereum (ETH) / AI-generated image

BitMine Technologies, led by Tom Lee, managing partner at Fundstrat Global Advisors, is on the brink of a stock collapse after recording billions of dollars in valuation losses from its Ethereum investment failure.

According to cryptocurrency media outlet BeInCrypto on Feb. 23 (local time), BitMine’s stock is facing a crisis amid massive unrealized losses on its Ethereum (ETH) holdings. The company recently purchased an additional 51,162 ETH, bringing its total holdings to 4,422,659 ETH. However, with the market price falling to nearly half of its average purchase price, the firm’s financial stability has been severely undermined.

BitMine’s average acquisition cost for Ethereum stands at around $3,821, while ETH is currently trading near $1,950. As a result, the company has incurred approximately $8.4 billion in unrealized losses, with 49% of its invested principal effectively wiped out. Its stock price has also plunged more than 83% from its peak of $160 last July to $26.70, rapidly eroding investor confidence.

Technical indicators warn of further downside risk. On Jan. 27, a death cross occurred as the 50-day moving average fell below the 200-day moving average, and a classic bearish descending triangle pattern has formed on the stock chart. If the stock fails to hold the $17 support level, many analysts predict it could plunge more than 40% further to $11, the 61.8% Fibonacci retracement level.

Negative market sentiment is accelerating in tandem with broader skepticism toward digital assets. Bitcoin (BTC) skeptic Peter Schiff has argued that if Bitcoin falls below $50,000, it could drop to $20,000, recommending aggressive selling. Policy uncertainty under the Donald Trump administration and the past critical stance of the Federal Reserve chair nominee are also weighing on funding conditions for crypto-related companies, including BitMine.

For BitMine to stage a rebound, its stock must first reclaim the $21 resistance level. However, if Ethereum continues trading far below the company’s average purchase price, institutional outflows and selling pressure are expected to intensify. Without a recovery in Ethereum’s price, BitMine currently faces a perilous situation in which defending its stock price may prove impossible.

Disclaimer: This article is provided for investment reference only, and no responsibility is assumed for any investment losses based on it. The content should be interpreted solely for informational purposes.