Tom Lee-Backed Bitmine Doubles Down on Ethereum With Massive Staking Move

BitMine Immersion Technologies has made a significant move in the Ethereum staking space, adding 186,336 ETH valued at $604 million to its staking portfolio. This brings its total staked ETH to 779,488, or $2.52 billion, as of early 2026. The firm, backed by Tom Lee, is positioning itself as a major player in the Ethereum staking ecosystem and is looking to leverage its growing stake for long-term yield.

BitMine now holds 4.14 million ETH, representing 3.43% of the total Ethereum supply. This aggressive accumulation strategy includes both new purchases and existing holdings being locked into staking contracts. The company has continued to purchase ETH throughout the end of 2025 and into early 2026, maintaining its status as the largest institutional buyer of the asset.

BitMine's strategic goal is to accumulate 5% of the Ethereum supply, a move Lee has referred to as the 'Alchemy of 5%.' The company has also taken steps to expand its capital-raising capacity by proposing a dramatic increase in its authorized share count from 500 million to 50 billion shares. This move is designed to support future capital needs and potential acquisitions as BitMine expands its Ethereum staking footprint.

Why Did This Happen?

BitMine's staking strategy is driven by the desire to generate steady, passive income from Ethereum's proof-of-stake mechanism. By staking ETH, the company secures a yield of between 3-5% annually while also contributing to the network's security. The company's staking activity aligns with a broader trend of institutional and high-net-worth investors adopting staking as a core capital allocation strategy.

BitMine's decision to stake a large portion of its holdings also reflects a shift from speculative trading to a more structured, income-focused approach. The company has stated that it views staking as a way to reduce liquidity risk and provide a more stable return for investors. This strategy differentiates BitMine from other crypto treasury firms that focus solely on price appreciation without generating yield.

How Did Markets Respond?

The market has responded positively to BitMine's staking activities, with its stock rising 14% following the announcement of the proposed share increase. The company's staking infrastructure is expected to generate $374 million in annual revenue once fully deployed, according to projections shared by Lee.

The broader Ethereum market has also seen a shift in staking dynamics. Ethereum staking demand has outpaced withdrawals for the first time in four months, suggesting renewed investor confidence in the network. This trend has been reinforced by Ethereum staking activity from major funds like Grayscale, which recently announced its first staking reward payout for its Ethereum Staking ETF.

What Are Analysts Watching Next?

Analysts are closely monitoring BitMine's progress toward its 5% Ethereum supply target, as well as the performance of its staking infrastructure. Tom Lee has predicted a short-term price pullback for Ethereum to around $1,800 in the first half of 2026, with a long-term target of $7,000–$9,000. This forecast is based on broader macroeconomic trends and the anticipated impact of U.S. regulatory developments in the crypto space.

The company's staking strategy is also being evaluated for its potential impact on Ethereum's network security and decentralization. While large staking operations like BitMine enhance network security by increasing the economic cost of attacks, they also raise concerns about centralization risks. The Ethereum community is actively monitoring these metrics through tools like the Gini coefficient, which tracks stake distribution among validators.

Ethereum's staking ecosystem is evolving rapidly, with more institutional players entering the space and new products being launched to support staking activities. The recent launch of Grayscale's Ethereum Staking ETF and the anticipated approval of additional staking-enabled ETFs signal that staking is becoming a more accessible and institutional-grade investment strategy.

The market is also watching how Ethereum's staking queues evolve. After months of long wait times, Ethereum's staking queues have now cleared, allowing new validators to join the network almost immediately. This development suggests that the network is no longer experiencing a shortage of stakers, and that staking is settling into a more stable and balanced state.

BitMine's continued accumulation and staking activity is expected to have a positive impact on Ethereum's price dynamics by reducing the amount of liquid ETH supply available on exchanges. This effect is particularly relevant during periods of price consolidation or after major network upgrades, when large holders tend to lock up their ETH as a long-term investment.

Overall, BitMine's move reflects a broader shift in the Ethereum ecosystem, where staking is becoming a more established and strategic allocation method. The company's success in expanding its staking operations and generating yield from its Ethereum holdings will be closely followed by investors, analysts, and the broader crypto community.