How much longer can Ethereum's last big buyer hold on?

Author: Zhou, ChainCatcher

As the cryptocurrency market continues to decline, BTC and ETH once fell to around $60,000 and $1,500, respectively, with Strategy and Bitmine both facing unrealized losses exceeding $10 billion. At the end of May, Strategy sold 32 BTC, breaking a long-standing narrative of not selling coins, and the financing model for buying coins entered a pressure test phase.

Against this backdrop, Bitmine announced the issuance of 9.5% annualized Series A perpetual preferred shares, raising approximately $274 million. As of the time of writing, Bitmine increased its holdings by 127,000 ETH last week, accumulating a total of 125,000 ETH over the past three days. The total holdings now amount to approximately 5.66 million ETH, with less than 400,000 ETH remaining to reach the 5% target.

As the most persistent and aggressive marginal buyer of ETH in the current market, Bitmine continues to increase its position despite facing unrealized losses of over $10 billion. Now, even it needs to rely on preferred shares to replenish its flywheel. If there are changes in the financing market and the coin-hoarding machine is forced to slow down, who else can support the price of Ethereum?

Buy enough 5% before the end of the year, and then what?

Bitmine began hoarding ETH in the second half of last year, planning to complete the "5% alchemy" within five years. Data shows that Bitmine plans to raise $19.2 billion through 50 equity issuances between July 2025 and June 2026, with all funds used to purchase ETH.

As of the time of writing, Bitmine's Ethereum holdings have reached approximately 5.66 million, with less than 400,000 ETH remaining to reach the 5% target, and the actual progress in one year has exceeded 90%.

Of these, approximately 4.719 million ETH have been staked, accounting for over 85% of total holdings, with expected annualized staking returns of about $230 to $296 million. This staking system is supported by the company's self-built MAVAN validator node network, which is considered the key structural design that distinguishes Bitmine from Strategy.

However, the cost of aggressive coin hoarding is also evident. Currently, the price of ETH is around $1,650, while the company's holding cost is as high as approximately $3,500, with its ETH treasury valued at only about $9.3 billion, and the company's overall loss reaching $10.5 billion, with a drawdown exceeding 50%. The company's stock price has also dropped nearly 90% from its peak.

10x Research points out that Bitmine's investors face two layers of losses: the unrealized losses from the decline in ETH is the first layer, and when investors purchase BMNR stock, they paid approximately $4.6 billion in premium relative to the underlying ETH net assets, which is the second layer. The combination of these two layers amplifies the actual loss for shareholders.

In the face of massive unrealized losses, Tom Lee characterizes this round of decline as superficial. He believes that the existing financial system has a lot of false transactions, while Ethereum has never experienced fraudulent transactions, with lower operating costs, and both on-chain transaction volume and daily active addresses have reached historical highs. The price correction is dominated by macro factors and the unwinding of leverage, with the fundamentals remaining intact. The longer-term bet is that AI agent systems will rely on blockchain operations, and the supply of ETH continues to shrink, making Ethereum the most direct beneficiary.

Tom Lee recently revealed that Bitmine is expected to complete its 5% target by the end of 2026, at which point it may not need to continue increasing its holdings. He also mentioned that the company may officially be included in the Russell 1000 index by the end of June, which, based on its market capitalization at that time, will bring at least $2.15 billion in passive fund buying to BMNR.

3% staking yield, how to support a 9.5% dividend?

On June 5, Bitmine completed the pricing of its Series A perpetual preferred shares: 3.5 million shares, with an issuance price of $80 per share and a par value of $100, raising approximately $274 million. The dividend yield is 9.5%, paid in cash weekly, and even if the board does not declare a dividend, the dividends continue to accumulate. Based on par value, the annualized dividend obligation is approximately $33.25 million.

Bitmine has the right to redeem early, with a redemption option at 110% of par value within 18 months after issuance, at 105% of par value from 18 months to 3 years, and at 100% of par value after 3 years, with additional payment required for any accumulated unpaid dividends at the time of redemption.

At first glance, this calculation is not difficult. By the end of May, Bitmine had staked a total of 4.7 million ETH, with expected annualized staking returns of about $230 to $296 million, which is 8 to 9 times the annualized dividend obligation.

However, the forecast of over $200 million is based on the assumption that the recent 4.7 million ETH will be fully staked. According to the prospectus, as of February 28, 2026, the company's staking income for the past 6 months was $11.18 million, annualized to about $22 million.

It is worth noting that staking returns are denominated in ETH, not USD. If ETH continues to decline, the company's staking income will also shrink accordingly.

Here lies a fundamental difference between Bitmine and Strategy. BTC has no native yield, and Strategy's STRC must pay dividends, relying solely on BTC price increases or selling coins. ChainCatcher has detailed this in the article “Strategy Cashes Out $2.5 Million, Bitcoin Market Value Vaporizes $80 Billion”.

The staking mechanism of ETH provides Tom Lee with a different path: if the price remains unchanged, staking yields will still be generated without having to touch the underlying assets. This is the true pressure-resistant advantage of the Bitmine model in the current bear market.

But this path seems unsustainable in the long run. Crypto KOL chenmo points out that with a low initial issuance, relying on staking yields to cover dividends is not a big issue, but as the scale of preferred share issuance continues to expand, a staking yield of 3% to 4% will inevitably be unable to cover the 9.5% annual interest, at which point only an increase in ETH price can maintain this logic.

Analyst Yuyue also stated that the STRC model is already under pressure in the current market, and following up with preferred shares at this time, even if it is a short-term positive, it may be interpreted by the market as a worse signal.

According to research by CointelegraphMT, there are two details in the prospectus of this issuance worth noting. The auditor was changed to KPMG on April 27, and at the same time, it was disclosed that there were significant deficiencies in internal controls, and the audit has not yet been completed, with the possibility of financial data being restated.

Additionally, the board has complete discretion over dividend payments, and the only mechanism for preferred shareholders to act is to nominate two directors after 18 consecutive months without receiving dividends.

If Bitmine stops buying after reaching 5%, where will the price of ETH go?

On-chain analyst Yu Jin stated, at the current buying pace, it is likely to be in place by next month. So, after buying enough, will they continue? If they stop, the last steadfast bulls in this market will disappear. What will support ETH?

Bitmine has been the most persistent and aggressive marginal buyer of ETH in the market over the past year. Other potential buyers are scattered and weak. The ETH spot ETF saw a net outflow of $173 million last week, and although it briefly turned positive on June 8 after 17 consecutive days of outflow, the strength was far less than the previous outflow scale.

Meanwhile, Goldman Sachs reduced its ETH ETF holdings by about 70% in the first quarter of 2026, and Harvard University's endowment fund completely liquidated approximately $87 million in ETHA holdings, selling everything after holding for just one quarter—details on the inflow and outflow of institutional funds can be found in the article “Harvard and Other Institutions Liquidate, Six Core Talents Depart in a Month, What’s Wrong with Ethereum?”.

Additionally, the legislative framework for stablecoins and the institutional incremental demand brought by RWA tokenization are slow variables, and it is difficult to fill the gap left by Bitmine in the short term.

Without an overall reversal in the cryptocurrency market, it is foreseeable that the treasury flywheel will be difficult to sustain, leading to a cycle where: ETH prices continue to decline, BMNR stock prices come under pressure, relative net asset premiums narrow, financing windows for issuance shrink, buying pace slows, and ETH further loses marginal support. This cycle does not even require Bitmine to actively sell a single ETH; the disappearance of buying power alone is sufficient.

Image source: AI generated

In a pessimistic scenario, if the financing market's acceptance of preferred shares declines, BMNR continues to hit new lows, buying slows significantly, and ETH may test the next key consensus level (around $1,000). DWF Labs co-founder Andrei Grachev believes that Strategy and Bitmine have a significant chance of creating the largest market crash in cryptocurrency history. This is a tail risk judgment and not a baseline expectation.

In a baseline scenario, if Bitmine maintains its buying, staking yields provide a buffer, and preferred shares are smoothly digested, ETH will oscillate and build a bottom in the $1,500 to $2,000 range. Although Bitmine has suffered heavy losses and ETH is unlikely to recover in the short term, the 10x Research report mentions that when stocks fall deep enough, the underlying assets become almost irrelevant; what investors are actually buying is pure optionality—essentially a free call option on ETH's future rebound, which has not yet been fully priced by the market.

In an optimistic scenario, the formal inclusion in the Russell 1000 brings passive funds, and the implementation of stablecoin legislation like the GENIUS Act clears institutional entry barriers. Standard Chartered maintains a target price of $4,000 for ETH by the end of 2026, believing that the recent price decline does not reflect the ongoing improvement in Ethereum's network fundamentals, and compares the current situation to the phase after the Amazon bubble burst in 2001—prices are temporarily disconnected from network value, but the infrastructure building has never stopped. The bank expects the ETH/BTC exchange rate to rebound to about 0.08 by the end of this decade, with a target price of $40,000 by the end of 2030.

Conclusion

Ultimately, how long this financing can sustain Bitmine's flywheel depends on the price of ETH. However, Bitmine's coin purchases are also an important part of supporting the price.

So the core question is, when Bitmine completes its 5% target and gradually fades out, who will take the baton? Traditional institutions are withdrawing, ETF funds are fluctuating, and the real incremental demand brought by stablecoins and RWA has not yet manifested on a large scale.

Perhaps Ethereum does not lack narratives, but when the liquidity inflection point will appear and where new marginal buyers will come from are key questions that will determine the price trend of ETH moving forward.