BMNR: Tom Lee Is Buying Ethereum Faster Than You or I Can

A deep dive into Bitmine Immersion Technologies

Introduction

Disclosure: I do own a stake in $BMNR.

BitMine Immersion Technologies represents what could be the most important opportunity in digital asset investing since MicroStrategy’s Bitcoin treasury strategy. Tom Lee, Chairman of the board, is executing on a framework that would position the company to own 5% of all Ethereum, a threshold that unlocks network effects through proof-of-stake power laws. The company is using capital markets techniques to accumulate the asset faster than any individual investor could on their own, taking advantage of what Tom Lee calls the “most important macro trade” of the next decade.

The investment thesis rests on several pillars:

• First, Wall Street is migrating onto blockchain infrastructure, and Ethereum has emerged as the institutional choice due to its perfect uptime record and robust smart contract capabilities.

• Second, the company trades at a premium to net asset value, which enables what sounds paradoxical but is actually accretive dilution that grows ETH per share faster than direct ownership would allow.

• Third, staking yields from Ethereum’s proof-of-stake consensus mechanism.

• Fourth, the 5% ownership target creates power law advantages in network influence and unlocks future revenue opportunities that smaller holders simply cannot access.

What makes BitMine particularly interesting to me is the speed and scale of their execution. At first glance, I really didn’t understand or believe in the concept of a Digital Asset Treasury. Those that keep up with my market open stream likely heard me criticize BMNR as a concept for what I felt was a very weird way to get exposure to ETH. I was also extremely skeptical about the dilution components towards how shareholders would be rewarded. However, the company is now raising over $1 billion per week and has become the 28th most liquid stock in the stock market despite launching only months ago. I changed my opinion after further understanding how BMNR is positioning themselves towards Ethereum and established a position, now a multi-six figure one with over 5,000 shares.

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Understanding Digital Asset Treasuries

Before diving into BitMine specifically, let’s break down digital asset treasuries. A DAT is a public company that collateralizes a cryptocurrency on its balance sheet and then uses capital markets to grow that holding over time. MicroStrategy pioneered this approach with Bitcoin. The company issues shares to public markets at a premium above the net asset value of its cryptocurrency holdings, uses those premium proceeds to acquire more of the underlying asset, and repeats the process to create a flywheel of accumulation.

The reason this works is that investors are willing to pay more than NAV for several distinct advantages.

First is velocity — an individual investor buying cryptocurrency faces limits on how quickly they can accumulate. They have to deploy their own capital, deal with exchange limits, and manage the operational complexity of custody. A well-run treasury can raise billions in a matter of weeks and deploy it instantly.

Second is institutional access. Many large funds cannot buy cryptocurrency directly due to mandate restrictions, regulatory concerns, or operational challenges. They can, however, buy shares of a public company that holds crypto. This creates a structural bid from a class of investors who would otherwise be shut out. Third is the volatility itself, which sounds counterintuitive. High volatility creates opportunities for options traders, and a robust options market creates liquidity and additional ways for investors to express views or hedge positions.

To give context to how much institutions want exposure to Ethereum, the Blackrock Ethereum ETF is the 15th largest ETF YTD in net inflows.

The premium to net asset value is also very important to understand. It’s similar to a P/E multiple: you pay a price-to-earnings multiple for a normal company’s ability to generate profits. The multiple expands or contracts based on growth rates, competitive positioning, and market sentiment. With a digital asset treasury, you pay a premium to NAV based on the company’s ability to grow your holdings of the underlying asset faster than you could on your own. If a treasury trades at 2x NAV and raises $100 million, it only “gives up” $50 million worth of NAV in the dilution but gets $100 million to spend on acquiring more crypto. That means everyone’s per-share holdings go up, not down. This is why the terminology matters so much. People hear “dilution” and assume it’s bad. In the context of a properly executing digital asset treasury, dilution at a premium to NAV is actually accretive.

Liquidity also matters because it means institutions can get in and out without moving the market, which is precisely what large asset managers need. If Tom Lee can get large asset managers to continue giving him the money that is needed to buy Ethereum faster than you or me, it becomes much more interesting.

The comparison to MicroStrategy is inevitable to understand the company. When Bitcoin went up 10x, MicroStrategy went up 25x. That multiple expansion came from the premium investors were willing to pay for velocity of accumulation, institutional access, management expertise, and the options market that developed around the volatility. BitMine is applying that exact playbook to Ethereum rather than Bitcoin. The question for investors becomes whether Lee can replicate Michael Saylor’s success in building a premium digital asset treasury, and whether Ethereum itself can deliver the kind of price appreciation that makes the investment make sense.

Some of the institutional investors that support Bitmine:

• ARK’s Cathie Wood

• MOZAYYX

• Founders Fund

• Bill Miller III

• Pantera

• Kraken, DCG

• Galaxy Digital

• Stanley Druckenmiller

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Tom Lee’s “1971 Moment” Thesis

Tom Lee isn’t buying Ethereum because he just likes the name. He believes we’re witnessing a structural shift in global finance comparable to 1971 when the United States went off the gold standard. This historical parallel is the foundation of his entire thesis, and understanding it is critical to understanding why he’s so convicted about Ethereum specifically rather than any other cryptocurrency. When Nixon ended dollar-gold convertibility in 1971, the dollar became what Lee calls a “synthetic instrument.” It was no longer backed by a physical commodity. It was backed by trust in the US government and the network effects of the financial system built around it. The dollar could have collapsed as many predicted it would. Instead, Wall Street built an entire ecosystem that made the dollar more dominant than it had ever been under the gold standard.

The statistics are staggering when you think about them:

• Today, 27% of global GDP is denominated in dollars. That’s massive when you consider the US economy itself is only about 25% of global GDP. It means dollar usage extends far beyond US borders.

• Additionally, 55% of central bank reserves globally are held in dollars, which gives the US enormous geopolitical leverage.

• 80% of all financial transaction pairs use the dollar. That means if you’re trading oil in Asia or buying European goods in South America, you’re probably using dollars as the intermediary currency.

Lee sees the same dynamic playing out with blockchain and Ethereum specifically. Over the last 12 months, there’s been a sea change in how the US financial establishment views cryptocurrency. It went from being seen as an enemy or disruptor of the financial system to being understood as the foundation of how US financial leadership will be maintained globally in the 21st century. The catalysts for this shift are concrete and policy-driven. Stablecoins have become the breakout product, what Lee calls the “ChatGPT moment” for crypto.

The SEC’s Project Crypto initiative is pushing Wall Street to build on blockchain rather than resist it. The Genius Act is establishing a regulatory framework that gives institutions confidence they won’t be sued or shut down for participating.

The key insight is that Wall Street doesn’t want the fastest blockchain or the one with the most features. They want reliability and trust. Ethereum has had zero downtime in its entire operational history. That’s extraordinary when you think about how complex the system is and how many transactions it processes. For an institution building multi-billion dollar businesses on top of a blockchain, uptime is everything. You can’t have your payment rails or tokenized securities go down because the underlying chain had a bug or got attacked.

Lee believes this creates a 1971-style moment where the infrastructure play actually outperforms the asset itself over the long term, just like Wall Street infrastructure plays outperformed gold in the 15 years after 1971 even though gold itself went up dramatically.

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The Two Pillars of ETH: Tokenization and Stablecoins

Tom Lee’s Ethereum thesis rests on two concrete trends that are already happening in the real world. As someone who has never cared about ETH, this really matters to me. Anyone can build a DAT over some coin and try to get a premium, but I can personally see the usecases for ETH in front of me today.

As someone who likes to invest in companies that actually create products and services, this starts to make ETH look more like a company offering a service vs just a cryptocurrency, which has made it easier for me to buy into a DAT focused on ETH.

The first pillar is tokenization of real-world assets. If you believe that physical and digital assets will eventually trade on blockchain, then tokenizing the financial system becomes a massive structural tailwind for Ethereum. Imagine stocks, bonds, real estate, commodities, art, collectibles, and really any asset that has value and changes hands. The traditional financial system handles these transfers through intermediaries like brokers, clearinghouses, and custodians. Each intermediary adds cost, time, and friction. Blockchains allow for direct peer-to-peer transfer with cryptographic proof of ownership.

Robinhood is pioneering the ability for people across the world to purchase stock tokens — representations of an underlying stock even if they aren’t buying an actual share, as a way to begin the tokenization process of all assets. They are doing this via a Layer 2 on Ethereum.

BlackRock has been vocal about tokenization being the next evolution of financial markets. They’re not talking about doing this on Bitcoin, which doesn’t have robust smart contract capabilities. They’re not building on newer chains that don’t have Ethereum’s track record.

They’re choosing Ethereum because it’s the only blockchain that combines smart contract functionality with institutional-grade reliability and the network effects of being where everyone else is already building. In traditional internet architecture, value accrues at the application layer—think Google, Facebook, Amazon. The underlying protocols like HTTP and TCP/IP are free and open. In blockchain architecture, value accrues at the protocol layer because that’s where the security and trust guarantees come from. Every transaction on Ethereum requires ETH for gas fees. Every smart contract needs ETH to execute. As more value moves onto Ethereum, more ETH gets locked up and used, which creates natural demand pressure.

The second pillar is stablecoins, which have become the “ChatGPT moment” for crypto, as Tom would say. A stablecoin is a digital token pegged to a fiat currency, usually the US dollar. Tether and USDC are the two largest, and they’re being used for everything from cross-border payments to trading on crypto exchanges to remittances in countries with unstable currencies. The stablecoin market has grown to over $300 billion in total value, and much of that supply lives on Ethereum.

When you send USDC from one person to another, that transaction settles on the Ethereum blockchain. The network effect here is powerful. The more stablecoins get issued on Ethereum, the more economic activity flows through Ethereum, which means more transaction fees and more demand for ETH itself. This is why Lee got excited about stablecoins specifically and why he mentions the Genius Act, which creates a regulatory framework for stablecoin issuers in the United States.

Ethereum has over a 50% share of the entire stable coin market cap as of October 17th, 2025:

What makes this very interesting to me is that stablecoins are arguably good policy for America, not just good business for crypto. When you use USDC, you’re using a digital dollar that’s backed by US treasury bonds held in custody. That creates demand for treasuries and extends dollar dominance into the digital realm. US Treasury Secretary Scott Bessent has said that the stable coin market, which is around $300B today, could go to $4T. The US government understands that a buyer for treasuries will help bring yields down, which will ultimately help bring the cost of borrowing capital down, so they are becoming very supportive of the industry.

This REALLY matters. The government being on your side is a macro tailwind and if ETH can continue to execute on the network becoming more powerful, regulatory frameworks will only continue to aid in its pursuit of being one of the most important global blockchains. China understands this as well, which is why they’re building their own digital yuan infrastructure. The US is now realizing that supporting stablecoin growth on public blockchains like Ethereum is a way to maintain financial leadership in a world that’s increasingly digital.

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Bitmine’s Core Strategy

When BitMine started on June 30, with the transaction closing on July 8, there was only $4 worth of Ethereum held per share. That’s the baseline. If you had bought an Ethereum ETF on that date, you’d have $4 of exposure that would move one-to-one with the price of ETH. Fast forward seven weeks to August 24, and BitMine shareholders had $39.84 worth of Ethereum per share. That’s not a gradual increase. That’s a 10x explosion in holdings while Ethereum itself only increased roughly 50% during that period.

I think it’s important to really double-down on this point because it creates the entire thesis — Ethereum went up 50%. Your per-share holdings went up 900%.

When BitMine raises capital by issuing shares, those shares sell for more than the underlying Ethereum they represent. That premium gets converted into additional Ethereum purchases, which increases everyone’s per-share holdings. The math works like this: if the stock trades at 2x NAV and the company raises $100 million, it’s only diluting shareholders by $50 million worth of NAV but getting $100 million to spend on buying more ETH. The net result is that every shareholder ends up with more ETH per share than they had before the capital raise. In this context, dilution becomes constructive because the premium more than offsets the share count increase.

The speed at which BitMine is executing this strategy is genuinely remarkable. When Ethereum dipped to $3700 after President Trump’s comments about China on October 10th, Tom Lee stepped in and bought almost $500M of ETH.

The company is now raising over $1 billion per week, which would be extraordinary for any company but is especially notable for one that only started a few months ago. This isn’t retail investors gambling on a meme stock. This is institutional capital coming in because large asset managers need exposure to Ethereum and can’t buy the asset directly due to regulatory constraints, mandate limitations, or operational complexity. BitMine gives them a public equity vehicle that’s liquid enough to get in and out of without disrupting the market. The company has become the 10th most liquid stock in America, which means institutions can deploy hundreds of millions of dollars without worrying about liquidity.

What Happens If BMNR Goes Below NAV?

This is a legitimate concern.

Other DATs have already gone below their NAV, and once you lose the premium, it’s not easy to get it back. One of the reasons I continue to buy BMNR is because of my belief that they will be able to stay above NAV and continue to dilute at a premium.

Two things to hedge against going below NAV:

1. The company has a $1 billion stock repurchase program in place specifically for this scenario. If BitMine trades at or below NAV, raising capital would be dilutive in the traditional sense because you’re giving up more value than you’re bringing in. In that case, the rational move is to stop raising and start buying back stock, which is exactly what the repurchase program allows. As long as there’s structural demand from institutions that need Ethereum exposure through public equities, and as long as the company continues to grow ETH per share, the premium should sustain.

2. I believe BMNR gets a “Tom Lee” premium. Now, this is important to understand because at the end of the day, someone has to be an ambassador for the stock. Someone has to actually get people to understand the thesis. Tom has massive distribution via social media and traditional media with a brand that is highly respected. He earned his name in crypto for calling BTC at $5K when he worked at JP Morgan and no one believed him. As a result, his ability to communicate to investors why ETH matters and how BMNR can capitalize on that is very important and differentiates his DAT from others in the space.

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The 5% Target

Tom Lee has stated publicly that BitMine’s goal is to own 5% of all Ethereum in existence.

In a decentralized network like Ethereum, having 5% ownership creates advantages that go far beyond just having 5% of the economic value.

The first advantage is straightforward: staking income. Ethereum operates on a proof-of-stake consensus mechanism, which means holders can stake their ETH to validate transactions and earn yield for doing so. At current holdings of approximately $9 billion worth of ETH, BitMine is generating around $300 million in pre-tax net income annually from staking. This is GAAP net income, not some adjusted earnings metric. It’s real cash flow from participating in network security.

The second advantage is governance and protocol influence. When you stake ETH, you’re not just earning yield. You’re also voting on network upgrades and changes to the protocol. A 5% stakeholder has meaningful input into how Ethereum evolves over time. This matters more than you might think because blockchain governance is still relatively immature, and having a large, sophisticated institutional voice in those discussions can shape the direction of the network in ways that benefit all stakeholders. BitMine becomes one of the most important validators on the network, which means they have relationships with developers, other large stakers, and the governance community. That influence compounds over time as the network grows and matures.

The third advantage is what Lee calls the power law effect for future business opportunities. If Wall Street is building its tokenized future on Ethereum, and those institutions eventually need to stake their ETH for security and yield, who are they going to work with? They’re going to work with the largest, most liquid, most reliable staking infrastructure provider, which will be BitMine if they hit the 5% target. This opens up entire revenue streams that don’t exist yet but become possible at scale. Think about staking-as-a-service for institutions, liquidity provision for large tokenized asset issuances, or infrastructure partnerships with Layer 2 solutions building on top of Ethereum. A 5% stakeholder is the first call when major projects need infrastructure partnerships. That’s not speculation. That’s how network effects work in practice.

There’s also a psychological and market structure component to the 5% target. In the early days of MicroStrategy’s Bitcoin accumulation, one of the narratives that helped drive the premium was that Saylor was accumulating so much Bitcoin that he was materially affecting supply-demand dynamics. Every time MicroStrategy announced a new purchase, it created a ripple through the market because everyone knew that Bitcoin was coming off the market and going into long-term holding.

People have already begun developing websites dedicated to tracking Bitmine’s ETH purchases and mNAV:

Chart from bmnr.rocks

The same dynamic could play out with BitMine and Ethereum. If the market knows that BitMine is perpetually bidding for ETH and locking it up in staking, that creates a supply shock that benefits all ETH holders. It’s similar to how corporate buyback programs work in traditional equities. The announcement of a large, persistent buyer creates a floor under the price and forces everyone else to adjust their models for available supply.

Volatility is Vitality

Michael Saylor coined the phrase “volatility is vitality.” In the context of DATs, it could not be more true.

One of the features of BitMine that scares some investors but attracts others is the extreme volatility. The stock can move 20% to 40% in a single day, which is stomach-churning if you’re used to traditional equities. However, this volatility is actually a feature of the model, not a bug, and understanding why helps clarify what kind of investment this is.

The volatility comes from several sources. First is the underlying asset itself. Ethereum is a volatile cryptocurrency that regularly moves 5% to 10% daily. When you add leverage through the premium to NAV, those moves get amplified in the stock. If ETH moves 10% and BitMine trades at 2x NAV, the stock could theoretically move 20% just from the underlying asset movement, and that’s before you account for changes in the premium itself.

The second source of volatility is the premium to NAV, which expands and contracts based on market sentiment, institutional demand, and execution on growing ETH per share. When results are strong and capital is flowing in, the premium expands, which creates additional upside beyond what Ethereum itself delivers. When sentiment sours or execution falters, the premium compresses, which creates downside that’s worse than just holding ETH directly. This creates a high-volatility equity that’s unsuitable for conservative investors but very attractive to options traders, hedge funds, and other sophisticated market participants who know how to manage volatility or use it to their advantage.

Take a look at the options market around Bitmine…1.4M option contracts are open and the company is usually within the top 50 names traded via derivatives daily. The IV, or implied volatility, is double of Microstrategy.

Options traders love volatility because it increases option premiums and creates more opportunities to profit from correctly predicting direction or managing risk. When a stock has a robust options market, it attracts additional institutional capital because institutions can hedge their positions, generate income through covered calls, or express complex views using options strategies. This creates a self-reinforcing cycle where volatility attracts options traders, options activity creates liquidity, and liquidity attracts institutional capital that further increases trading volume.

The volatility also serves as a filtering mechanism that selects for the right kind of shareholder. If you can’t stomach 30% drawdowns or handle the psychological stress of watching your position swing wildly, you probably shouldn’t own BitMine. But if you’re comfortable with volatility, understand the underlying thesis, and have a multi-year time horizon, the volatility actually creates buying opportunities.

It also becomes VERY attractive for option sellers looking to yield premium from selling calls or puts — the best premiums come from the most volatile names.

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Price Targets and Timeline

Tom Lee has been explicit about his price targets for Ethereum, which gives us a framework for thinking about BitMine’s potential upside.

By the end of the year, Lee expects Ethereum to be somewhere in the $10,000 to $12,000 range, which would be a 4x to 5x move from current levels. His reasoning is that crypto’s price action is heavily weighted to the fourth quarter historically.

If that pattern holds, and if institutional adoption continues accelerating through the Ethereum ETF launches and Wall Street building on the chain, then the $10,000 to $12,000 target could happen. It would put Ethereum’s market cap in the range of $1.2 to $1.4 trillion, which is still well below Bitcoin’s peak market cap and seems reasonable if the tokenization thesis plays out even partially. Now, I personally am not sure if ETH can get there by end of year, but I do believe it will eventually get there because of the expansion in use cases, which is why I hold the stock.

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Final Takeaways & Why I Established A Position

BitMine has several risks that need to be understood clearly before committing capital. The first and most obvious risk is that Ethereum itself fails to deliver on the institutional adoption thesis.

If Wall Street decides to build on a different blockchain, or if tokenization never reaches the scale that Tom Lee is projecting, the entire thesis breaks down. Ethereum would still have value as a decentralized network for DeFi and other applications, but it wouldn’t justify the $60,000 long term price target per ETH valuation that Lee cites from research. In that scenario, BitMine would likely trade below NAV because there would be no reason to pay a premium for accumulation velocity if the underlying asset isn’t going anywhere. I have made an investment in BMNR purely on my belief in ETH as an asset class first and foremost. Without that belief, buying BMNR becomes impossible.

The second major risk is premium compression or collapse. The entire digital asset treasury model depends on the stock trading at a premium to NAV. If that premium disappears, either because of market sentiment, competition from other Ethereum treasuries, or easier direct access for institutions, the accretion machine stops working. If a recession takes place, for example, that premium could collapse. BitMine has a stock repurchase program to handle situations where the stock trades at or below NAV, but if the premium stays compressed for an extended period of time, it wouldn’t matter.

Overall, I have a deep belief in the future of assets coming on chain. First and foremost, that is what matters to me. If I think tokenization and stable coins are going to be a massive, multi-trillion dollar market over the next decade, then I need exposure. Bitmine creates a way to get exposure while also being able to own more ETH per share faster than I could personally buy it myself.

Second, I am selling calls against the position and the premiums are fantastic. I did a 3-hour free video on selling options that you can watch here, but as someone who enjoys the process to generate yield, this stock is one of the best in the market. However, I say this knowing it comes with massive volatility and my belief in ETH is what allows me to stay long the name while dealing with the volatility.

Finally, Tom Lee is someone I believe will get the world to understand the broader ETH thesis and his ability to raise capital to continue acquiring the asset is simply not something that can be replicated even if a million companies try to create digital asset treasuries around Ethereum. His thesis about Ethereum converging with Wall Street is also something I think he will be right about long term and as a result, owning the name that owns the most ETH to me makes sense.

It just seems like the most important companies in the world continue to choose Ethereum as their blockchain of choice, which over time, should increase the overall value of the network.

Thank you for taking the time to read — please let me know what other companies you’d like a deep dive on down below.

If you’d like to watch my interview with Tom Lee on Bitmine, you can here. Please let me know your thoughts in the comments and what other companies you’d like to see deep dives on!