Ethereum News Today: Kerrisdale Challenges BitMine's $18B ETH Model as Market Shifts to Direct Exposure

Kerrisdale Capital has initiated a short position in BitMine Immersion (BMNR), an Ethereum-focused digital asset treasury firm, citing an unsustainable business model amid shifting market dynamics. The firm argues that BitMine's strategy-issuing shares at a premium to fund crypto acquisitions-mirrors that of Strategy (MSTR) but lacks the same market tailwinds. Kerrisdale highlighted that BitMine has raised over $10 billion through at-the-market (ATM) stock sales since July 2025, averaging $170 million daily, which the firm claims has eroded investor enthusiasm and led to a declining premium. The short-seller also criticized a recent $365 million equity raise as a "discounted giveaway" when warrants are factored in, further undermining its thesis .

BitMine, which holds 2.83 million ETH and $13.4 billion in crypto and cash, has positioned itself as the leading Ethereum treasury by market capitalization. However, Kerrisdale noted that despite rising token holdings, ETH-per-share accretion has slowed, with the firm's market premium dropping from 2.0x in August to 1.2x in October. The firm attributed this to opaque disclosures and a lack of differentiation in a competitive landscape where over 150 U.S.-listed companies are pursuing similar strategies. Kerrisdale also questioned the gravitational pull of BitMine's executive chairman, Thomas Lee, arguing that his influence pales in comparison to figures like Michael Saylor, whose public persona helped sustain MSTR's premium .

The short report aligns with Kerrisdale's previous bearish stance on digital asset treasuries. The firm previously profited from shorting MSTR against a long bitcoin position, a strategy it now applies to BMNR. While acknowledging Ethereum's long-term potential, Kerrisdale urged investors to bypass intermediaries like BitMine and purchase ETH directly or through upcoming ETFs, which offer lower costs and greater transparency. The firm also emphasized that the broader market is shifting away from premium-based models, with competition and regulatory clarity reshaping the crypto treasury sector.

BitMine's stock price has declined in response to the report, falling 2% to $58 per share in its latest trades. The firm's recent press release highlighted its institutional backing, including support from ARK's Cathie Wood and Founders Fund, and its goal of acquiring 5% of the global Ethereum supply. However, Kerrisdale's analysis suggests that BitMine's aggressive capital-raising and dilution risks could undermine its value proposition. The firm's stock has traded an average of $2.5 billion daily, ranking it as the 28th most actively traded U.S. stock, but its high issuance rate has drawn scrutiny from short-sellers and analysts .

A BitMine representative did not respond to requests for comment. The firm's strategy, which involves leveraging regulatory arbitrage between Delaware and Quebec, has been praised for its transparency but criticized for political entanglements. Kerrisdale's report underscores broader concerns about the sustainability of premium-based models in a market increasingly dominated by direct ETH exposure and institutional-grade products. As Ethereum ETFs and other alternatives gain traction, BitMine's ability to maintain its premium will depend on its capacity to address dilution concerns and demonstrate clear value over direct token ownership.

Source: [1] Coindesk (https://www.coindesk.com/markets/2025/10/08/kerrisdale-shorts-usd18b-ethereum-treasury-firm-bitmine-slams-unsustainable-strategy) [2] Yahoo Finance (https://finance.yahoo.com/news/bitmine-immersion-stock-falls-kerrisdale-142826647.html)