Ethereum News Today: Kerrisdale Bets Against Ethereum Middlemen as Direct Exposure Rises

Kerrisdale Capital has initiated a short position against BitMine Immersion (BMNR), a digital asset treasury (DAT) firm led by Fundstrat co-founder Thomas Lee, citing an outdated business model and deteriorating market conditions. The firm argues that BitMine's strategy-issuing shares at a premium to purchase Ethereum and boost token-per-share metrics-mirrors that of MicroStrategy (MSTR) but lacks viability in today's competitive landscape. Kerrisdale noted that the DAT playbook has become "basic and unoriginal," with over $100 billion in planned crypto-treasury offerings saturating the market. This saturation has eroded the scarcity and premium valuations that once supported such strategies, according to the firm.

BitMine, which transitioned from a Bitcoin miner to an Ethereum-focused treasury in 2025, has raised $10 billion since July 2025 through at-the-market stock sales, accumulating 2.8 million ETH. Its stock surged from $5 to over $100 following the launch of the Ethereum treasury strategy but has since retreated to around $58. Kerrisdale criticized the firm's aggressive stock issuance-$170 million daily-and its $365 million equity raise, which it labeled a "discounted giveaway" when warrant terms were factored in. The firm also highlighted a decline in BitMine's premium to net asset value (NAV), which fell from 2.0x in August to 1.2x in October.

The firm's critique extends to Thomas Lee's leadership, noting that while Lee brings strategic credibility, he lacks the "cult-like following" of figures like Michael Saylor of MicroStrategy. Kerrisdale described Lee as an "underwhelming meme lord" whose traditional finance (TradFi) approach contrasts with the viral appeal driving DAT valuations. The firm also pointed to opaque disclosures and slowing ETH-per-share growth as further weaknesses in BitMine's model.

Market dynamics are shifting as institutional Ethereum holdings and ETF inflows grow. Over 150 U.S.-listed firms are reportedly planning crypto-treasury offerings, while Ethereum ETFs offer lower-cost exposure. Institutions now hold 12.5 million ETH (10.31% of the network's supply), with corporate treasuries and ETFs accounting for 5.66 million and 6.81 million ETH, respectively. This trend underscores a broader shift toward Ethereum as a productive asset, though Kerrisdale argues direct ETH ownership is preferable to intermediated exposure.

Kerrisdale's short position is not a bet against Ethereum itself but against the sustainability of DAT models. "If you want ETH, just buy it directly, stake it, or invest through one of the new ETFs. BitMine's middleman pitch has run its course," the firm stated. The report warns that BMNR's premium is "destined to sink," citing generic strategies, rising competition, and declining investor enthusiasm.

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Source: [1] The Crypto Times (https://www.cryptotimes.io/2025/10/09/kerrisdale-shorts-bitmine-stock-says-its-crypto-strategy-is-outdated/)

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

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