Ethereum News Today: Kerrisdale Slams BMNR's ETH Play as DAT Sector Faces NAV Collapse

Du Jun, founder of Vernal, has emphasized that shorting premium treasury companies like BitMine (BMNR) is a viable strategy, but he cautions against shorting Ethereum (ETH), calling it a "very foolish" move. This sentiment aligns with broader market dynamics as Kerrisdale Capital, a prominent short-seller, announced a short position on BMNR, the Ethereum-focused treasury firm led by Fundstrat's Thomas Lee. Kerrisdale criticized BMNR's business model as a relic of a bygone crypto era, arguing that market conditions no longer support its strategy of issuing shares at a premium to accumulate Ethereum .

BMNR's shares, which surged from $5 to over $100 following its pivot to an Ethereum treasury strategy, have since retreated to around $58, reflecting waning investor enthusiasm. Kerrisdale highlighted the firm's aggressive share issuance-averaging $170 million daily-as a factor that has shifted early enthusiasm to fatigue. The firm also questioned the leadership of Thomas Lee, noting his lack of a cult-like following compared to figures like Michael Saylor of Strategy (MSTR) . Despite these criticisms, Kerrisdale remains bullish on ETH itself, advising investors to purchase the asset directly rather than through intermediaries like BMNR .

The broader digital asset treasury (DAT) sector has faced significant headwinds, with market net asset value (mNAV) ratios collapsing for many firms. Standard Chartered warned that mNAV compression-where enterprise value falls below the value of crypto holdings-has become a critical risk for smaller DATs. This trend is driven by market saturation, unsustainable business models, and the proliferation of Ethereum and Solana treasury strategies. Over 150 U.S.-listed firms are reportedly planning $100 billion in crypto treasury offerings, intensifying competition and pressuring BMNR's premium .

Technical analysis of BMNR's stock reveals mixed signals. While Kerrisdale's short position has contributed to a 3% pre-market drop to $58, some analysts see potential for a rebound. Donald Dean, a crypto analyst, noted minor weakness on the 4-hour chart but maintained a price target of $71.74, anticipating a retest of August highs after consolidation. Conversely, Mike Investing argued that BMNR, which has been consolidating within a wedge pattern for three months, could see a "euphoric squeeze" with a potential target of $110 by November .

The sector's fragility is further underscored by regulatory scrutiny and liquidity risks. Standard Chartered highlighted that over 95% of new shares for many DATs are tied to pending transactions, which could trigger selling pressure once registrations are effective. Additionally, the SEC and FINRA have investigated selective disclosure practices among crypto treasury firms, adding legal uncertainty to an already volatile market . For BMNR, reduced transparency in recent weekly updates-omitting key metrics like share count and NAV-per-share-has compounded investor concerns .

In the short term, BMNR's stock may remain volatile as hedge funds exploit its liquidity. A 10% drop in ETH could see BMNR's shares decline 15–20%, mirroring the leverage inherent in premium trading. However, BMNR's $569 million in unencumbered cash and ability to issue equity at a premium could allow it to capitalize on dips by buying Ethereum at lower prices. This strategy, akin to MicroStrategy's Bitcoin playbook, could reinforce BMNR's position as a leading ETH aggregator .

Long-term viability for DATs hinges on differentiation, financing capabilities, and yield generation. While Ethereum's staking yields offer an edge over Bitcoin treasuries, Standard Chartered predicts sector consolidation, with larger players like MSTR and BMNR potentially acquiring weaker rivals. For BMNR, the ability to absorb smaller firms at a discount-such as rumored interest in ETHZilla-could transform its narrative from a passive treasury to a yield-generating entity .

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

[2] Gate (https://www.gate.com/news/detail/14575050)

[3] Cointelegraph (https://cointelegraph.com/news/digital-asset-treasuries-mnav-collapse-standard-chartered)

[4] Coinspeaker (https://cryptorank.io/news/feed/bc040-bitmine-stock-shorts-eth-premium)

[5] BTCC (https://www.btcc.com/en-US/square/ThecoinrepublicEN/1029883)

[6] Investment Gems (https://investmentgems.net/2025/09/22/what-happens-in-a-10-eth-dip-and-why-bmnr-might-be-the-play/)