Ethereum News Today: BitMine's ETH Premium Cracks as Market Demands Direct Exposure, Kerrisdale Says

Kerrisdale Capital has launched a bearish short position against BitMine Immersion (BMNR), a digital asset treasury firm led by Fundstrat's Thomas Lee, criticizing its strategy of issuing shares to accumulate Ethereum (ETH) as outdated and unsustainable. In a report published on October 8, 2025, the short-seller firm argued that BitMine's business model-mirroring that of MicroStrategy (MSTR)-relies on a "reflexive loop" of issuing equity at a premium to grow token-per-share metrics, a strategy it claims is no longer viable amid shifting market conditions. The firm highlighted that BitMine's market premium has collapsed from 2.0x in August to 1.2x by October, signaling waning investor enthusiasm.

BitMine, which transitioned from a Bitcoin miner to an ETH-focused treasury company in 2025, has raised over $10 billion since July through at-the-market (ATM) stock sales, acquiring more than 2.8 million ETH. Its stock price, which surged to $100 in early 2025 following the pivot, has since retreated to around $58, reflecting growing skepticism about the model's viability. Kerrisdale accused the firm of excessive stock dilution, noting that $170 million in daily equity issuance has eroded early investor confidence. The report specifically criticized BitMine's $365 million September equity raise, calling it a "discounted giveaway" when accounting for warrant terms.

The firm also targeted BitMine's leadership, particularly Thomas Lee, who co-founded Fundstrat and serves as executive chairman. While Lee is recognized for his media presence and analytical reputation, Kerrisdale argued he lacks the "cult-like following" of MicroStrategy's Michael Saylor, whose persona helped sustain investor fervor during aggressive Bitcoin accumulation. The report noted that BitMine's growth in ETH-per-share has slowed, and its disclosures have become increasingly opaque, further undermining its appeal.

Kerrisdale emphasized that BitMine faces intensifying competition from over 150 U.S.-listed firms planning $100 billion in crypto treasury offerings. Additionally, the impending launch of Ethereum ETFs is expected to provide more cost-effective and transparent ETH exposure, directly challenging BitMine's position as an intermediary. The firm reiterated its bullish stance on Ethereum itself but advised investors to "buy it directly, stake it, or invest through one of the new ETFs," dismissing the need to pay a premium for exposure via BitMine's stock.

BitMine's stock price dipped 2% in response to the report, though it partially recovered from an earlier 5% intraday decline. The company has not publicly responded to the criticism, but its trajectory mirrors that of other crypto treasury firms like Riot Platforms and MicroStrategy, which have faced similar scrutiny from Kerrisdale in the past. Meanwhile, institutional demand for Ethereum has surged, with ETFs and corporate treasuries now holding over 12.48 million ETH-roughly 10.31% of the token's total supply.

The report underscores a broader shift in the crypto treasury landscape, where market dynamics and regulatory clarity are reshaping investor behavior. As Ethereum ETF inflows continue and competition intensifies, BitMine's ability to maintain its premium will depend on its capacity to differentiate its strategy amid a crowded field. For now, Kerrisdale's bearish thesis highlights the fragility of models reliant on speculative momentum in a maturing market.

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[1] Coindesk (https://www.coindesk.com/markets/2025/10/08/kerrisdale-shorts-usd18b-ethereum-treasury-firm-bitmine-slams-unsustainable-strategy)

[2] Coincentral (https://coincentral.com/bitmine-immersion-faces-criticism-from-kerrisdale-capital-for-unsustainable-strategy/)

[3] Insidebitcoins (https://insidebitcoins.com/news/tom-lee-under-fire-as-short-seller-slams-bitmines-relic-eth-strategy)

[4] Cointelegraph (https://cointelegraph.com/news/bitmine-stock-choppy-kerrisdale-short-seller-report)

[5] Cryptonews (https://cryptonews.com/news/short-seller-kerrisdale-targets-tom-lees-bitmine-calls-model-extinct/)

[9] TradingView (https://www.tradingview.com/news/cointelegraph:7f1b96ffb094b:0-ether-vs-bitcoin-treasuries-which-strategy-is-winning-in-2025/)