TLDR
- BitMine Immersion chairman Tom Lee defends the company’s $6 billion in unrealized ether losses, calling them an expected result of its long-term ethereum treasury strategy.
- Lee compares BitMine to an index product, saying paper losses during crypto downturns are “by design” rather than a flaw.
- The company now holds 4.24 million ETH worth approximately $9.6 billion, down from nearly $14 billion in October.
- Lee warns that crypto markets are still working through a deleveraging phase that could extend into early 2026.
- Despite mounting losses, Lee maintains that “ethereum is the future of finance” and BitMine continues adding to its position.
BitMine Immersion chairman Tom Lee is standing firm on his company’s ethereum strategy. Even as unrealized losses pile up past $6 billion.
Bitmine Immersion Technologies, Inc., BMNR
Lee took to X this week to defend the treasury company’s approach. He said the drawdown isn’t a mistake—it’s exactly how the strategy is supposed to work.
“Crypto is in a downturn, so naturally ETH is down,” Lee wrote. He added that paper losses are “not a bug — it’s a feature.”
The company holds 4.24 million ETH, now valued at roughly $9.6 billion. That’s down from nearly $14 billion in October when ether traded higher.
BitMine bought more than 40,000 ETH shortly before the latest price drop. The timing intensified scrutiny on the firm’s balance sheet exposure.
TOM LEE IS DOWN $5 BILLION… BUT HE’S STILL BUYING $ETH
Tom Lee’s Bitmine is now down a total of $5.85 BILLION on ETH, which they purchased at an average price of ~$3650.
However: they just bought another $40M ETH. A fresh wallet received $46.04M ETH matching existing Bitmine… pic.twitter.com/f3F5fwCMcX
— Arkham (@arkham) February 3, 2026
Lee compared BitMine to an index-style product. He questioned whether similar criticism gets applied to index funds during market declines.
The chairman said BitMine is built to track ether’s price and outperform it over a full market cycle. Not to trade tactically around short-term moves.
That philosophy mirrors bitcoin treasury companies. They argue volatility is simply the price of maintaining long-term exposure to a core asset.
But BitMine’s holdings are massive. Price swings create outsized impacts on reported results, especially during thin liquidity and forced selling in derivatives markets.
The company estimates annual staking revenue around $164 million. That income provides limited cushion during sharp drawdowns.
Market Outlook and Technical Signals
Lee struck a cautious tone on near-term conditions. He warned crypto is still working through a deleveraging phase that could stretch into early 2026.
Speaking on CNBC, Lee said crypto had “taken it much worse than we expected.” He noted a lack of leverage in the system and improving network activity.
Lee pointed to capital flowing into precious metals as a factor. Gold and silver surged 37.4% and 106.9% respectively before reversing sharply.
Gold briefly climbed above $5,600 an ounce before posting its steepest one-day decline since 1983. It fell more than 9% on Friday.
Since Lee’s interview, prices continued sliding. Bitcoin traded at $77,357, down 1.4% over 24 hours and 11.8% over the week.
Ethereum traded around $2,265, down 3.5% on the day and more than 22% over seven days.
Lee flagged uncertainty around the Federal Reserve. He said markets often test new central bank leadership.
The confirmation process for Kevin Warsh, Trump’s pick for Fed chair, could make mid-year particularly choppy for risk assets.
From a technical perspective, Lee said conditions now appear aligned for crypto to bottom. He cited analysis from advisor Tom DeMark.
DeMark had forecast Bitcoin falling to the high $70,000s and ether to around $2,400. Lee said both price levels and sufficient time have now converged.
Recent Accumulation Activity
BitMine’s conviction showed through its actions last week. The company acquired an additional 41,788 ETH worth roughly $96 million during the downturn.
The firm now holds more than 4.28 million ETH. That represents over 3.5% of Ethereum’s circulating supply.
Based on its most recent SEC filing, BitMine accumulated much of its holdings at an average price near $4,000 per ETH. Current prices sit around $2,265.
Lee maintains that Ethereum network activity remains robust. Active addresses and transaction activity are accelerating as Wall Street firms build out digital asset businesses.
However, researcher Andrey Sergeenkov attributed the explosion in Ethereum addresses to address poisoning attacks rather than organic growth.
Despite the challenges, Lee’s stance remains unchanged. “Bottom line,” the firm said, “ethereum is the future of finance.”
Last week, BitMine acquired 41,788 ETH worth roughly $96 million, bringing total holdings to more than 4.28 million coins.
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