Ethereum News Today: Market Shifts Expose Flaws in BitMine's Premium Strategy, Kerrisdale Says

Kerrisdale Capital has initiated a short position in BitMine Immersion (BMNR), a digital asset treasury firm focused on Ethereum, arguing that its business model is outdated and ill-suited to current market conditions. The firm's report, published on October 8, 2025, criticizes BitMine's strategy of issuing shares at a premium to reinvest proceeds into Ethereum, a tactic previously employed by companies like MicroStrategy (MSTR). Kerrisdale contends that the model, which relies on self-reinforcing cycles of share issuance and asset accumulation, has lost its viability as market enthusiasm wanes and competition intensifies.

BitMine's pivot from a Bitcoin mining operation to an Ethereum-heavy treasury began in late 2024, with the firm raising over $10 billion through at-the-market stock sales since July 2025 and acquiring 2.8 million ETH. However, Kerrisdale highlights that the pace of its stock issuance-approximately $170 million daily-has eroded investor confidence, transforming initial optimism into fatigue. The firm also criticized BitMine's recent $365 million equity raise as a "discounted giveaway" when adjusted for warrant terms.

The report further scrutinizes the leadership of Fundstrat co-founder Thomas Lee, noting that his influence pales in comparison to figures like Michael Saylor, who propelled MicroStrategy's Bitcoin strategy. Kerrisdale argues that Lee's lack of a "cult-like following" undermines BitMine's ability to sustain premium valuations, particularly as the net asset value (NAV) premium for BMNR has contracted from 2.0x in August to 1.2x in October. Meanwhile, over 150 U.S.-listed firms are reportedly planning $100 billion in crypto treasury offerings, intensifying competition and reducing the appeal of BitMine's model.

Kerrisdale's thesis is not a bet against Ethereum itself but against the premium paid for indirect exposure to the asset. The firm advocates direct ETH purchases, staking, or ETFs as more efficient alternatives. This stance aligns with broader market trends, as Ethereum's recent outperformance over Bitcoin has been driven by institutional adoption of its staking yields and DeFi integration. However, BitMine's opaque disclosures and slowing ETH-per-share growth have further weakened its case, according to Kerrisdale.

The short report coincided with a 2% decline in BMNR's stock price, which had previously surged from $5 to over $100 before retreating to $58. Investors remain wary of the firm's aggressive capital-raising strategy and potential dilution risks, particularly as Ethereum ETFs and lower-cost alternatives gain traction. Analysts note that while BitMine's Ethereum holdings have expanded, the market's focus has shifted toward transparency and yield generation, areas where the firm appears to lag.

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

[2] Cryptotimes (https://www.cryptotimes.io/2025/10/09/kerrisdale-shorts-bitmine-stock-says-its-crypto-strategy-is-outdated/)

[3] Yahoo Finance (https://finance.yahoo.com/news/bitmine-immersion-stock-falls-kerrisdale-142826647.html)

[4] Gate (https://www.gate.com/news/detail/14572757)