Culper: Ether-linked security shorts include Bitmine Immersion

Culper: Ether-linked security shorts include Bitmine Immersion

Kerrisdale Capital has initiated a short position against BitMine Immersion (BMNR), an ether-focused digital asset treasury firm, citing concerns over its sustainability and market viability. The firm argues that BitMine's strategy—issuing shares to raise capital for ether purchases—mirrors that of Strategy (MSTR) but lacks adaptability to current market conditions. Kerrisdale described the approach as a "relic of a bygone crypto era," noting that factors such as scarcity-driven premiums and meme-like enthusiasm, which previously supported such models, have diminished according to analysis.

BitMine, led by Fundstrat co-founder Thomas Lee, has raised over $10 billion since July 2025 through at-the-market stock sales, acquiring 2.8 million ETH. However, its stock price has declined from a peak of $100 to approximately $58, reflecting investor fatigue amid a daily issuance pace of roughly $170 million. Kerrisdale criticized the firm's latest $365 million equity raise as a "discounted giveaway" when accounting for warrant terms and highlighted declining ETH-per-share growth despite expanding token holdings as reported.

The firm also questioned Lee's ability to replicate the investor fervor associated with figures like Michael Saylor, emphasizing that BitMine's premium has contracted from 2.0x in August to 1.2x in October. Increased competition, including over 150 U.S.-listed firms planning $100 billion in crypto treasury offerings and upcoming Ethereum ETFs, further challenges BitMine's model according to analysis.

Kerrisdale remains bullish on ether itself but advocates direct ETH purchases over intermediaries like BitMine. A BitMine representative did not respond to requests for comment. Shares of the company fell 2% on Wednesday.