Ethereum News Today: Bitmine's 'Alchemy of 5%' Ignites Institutional Ethereum Grab

Bitmine Immersion Technologies has made a significant institutional move in the Ethereum market, purchasing 128,718 ETH worth $480 million during a recent market downturn triggered by U.S. President Donald Trump's announcement of 100% tariffs on Chinese software imports and rare earth exportsTokendailies^[4]. This acquisition, confirmed by blockchain analytics firm Lookonchain, marks one of the largest single-purchase Ethereum accumulations by a corporate entity, with Bitmine now holding approximately 2.96 million ETH-nearly 2.5% of the total Ethereum supplyTokendailies^[4]. The purchase was executed using six newly created wallets and occurred as Bitcoin and Ethereum prices fell by 13% and 20%, respectively, during the crashTokendailies^[4].

Bitmine's strategy, led by Fundstrat Capital CIO Tom Lee, aims to eventually control 5% of all Ethereum, a target Lee refers to as the "alchemy of 5%"Tokendailies^[4]. The company has staked nearly all its ETH holdings, generating annual yields of 3% to 5% through validator nodesTokendailies^[4]. This move aligns with broader institutional demand for Ethereum, as corporate treasuries and ETFs have collectively acquired 3.8% of all circulating ETH since June 2025, nearly double Bitcoin's fastest accumulation rate during the 2024 election cycle.

The purchase occurred amid stark contrasts in market behavior. While retail traders faced massive liquidations-over $19 billion in leveraged positions wiped out in 24 hours-Bitmine and other institutional players capitalized on discounted pricesTokendailies^[4]. A mystery whale also accumulated 92,899 ETH ($412 million) from Kraken over four days, using three new walletsCointelegraph^[1]. Meanwhile, BlackRock accelerated its ETH accumulation 15x faster than Bitcoin holdings over the past 30 days, with Ethereum holdings growing 65% compared to 4% for BitcoinCointelegraph^[1].

Market dynamics highlight a growing divide between institutional confidence and retail panic. Retail investors, particularly those with short-term holdings, realized $553 million in daily gains in August, far outpacing long-term holdersCointelegraph^[1]. However, exchange supply levels for Ethereum have dropped to their lowest since 2016, driven by institutional accumulation and staking activity. This trend has been reinforced by record on-chain data, including a 47% surge in decentralized exchange (DEX) volume to $33.9 billion weekly.

Analysts suggest Bitmine's aggressive buying could stabilize Ethereum's price and reduce volatility. The company's stock, traded on the NYSE as BMNR, ranks 28th in U.S. trading volume, with an average daily value of $2.5 billionTokendailies^[4]. Despite facing $2 billion in unrealized losses from prior market declines, Bitmine's strategy hinges on long-term blockchain adoption and AI-driven token economiesTokendailies^[4].

The purchase has drawn mixed reactions. While major investors like Cathie Wood's ARK Invest and Peter Thiel's Founders Fund support Bitmine's approach, critics such as Kerrisdale Capital argue the company's rapid share issuance could dilute existing shareholdersTokendailies^[4]. Nonetheless, Bitmine's actions reflect a broader shift in crypto markets, where institutional players increasingly view dips as opportunities rather than risks.