Bitmine Immersion Technologies, one of the most notable institutional investors in the Ethereum field, doubled the number of its shares within six months and created one of the largest Ethereum portfolios in the world thanks to the capital increase. While the US-based company was initially known for digital asset mining, it has aggressively changed its strategy since the beginning of 2024, focusing heavily on ether accumulation.
Rapidly increasing shares and capital
According to the company’s latest report submitted to the SEC, the number of shares, which was 232 million on August 31, 2023, reached 494 million on February 28, 2024. Bitmine realized a capital increase of over 10.2 billion dollars in this six-month period, increasing its total paid capital to 18.5 billion dollars. All of these new funds invested were directed to ether purchases.
As of April 12, Bitmine’s total amount of ether was announced as 4.87 million. The company acquired these assets at an average price of $ 2,206 and with this amount, it became the top in institutional Ethereum reserves worldwide. According to the latest data, Bitmine’s ethereum holdings account for approximately 5 percent of the global supply. The company is the second company with the highest corporate cryptocurrency reserves, after only the Bitcoin-focused Strategy company.
Activities and financial statement
Bitmine posted a net loss of $3.8 billion in the first quarter of 2024. On the other hand, as the price of ether in the market increased to approximately $ 2,325, the company’s assets partially recovered its loss. However, the deterioration in the income-expense balance attracted attention: The income from own mining decreased by 86 percent compared to last year, falling to 219 thousand dollars. The company tried to close this gap by evaluating its Ethereum holdings through staking; It generated $10.2 million in revenue from staking activities during the quarter.
While overall revenue reached $11 million, general and administrative expenses rose to $75 million during the same period. While such expenses increased to 298.6 million dollars in the last six months, the company’s total income was limited to only 13.3 million dollars. In particular, premium share payments based on the company’s equity increase played an important role in these costs.
In the details of the report, it was stated that Bitmine has abandoned its operating model from traditional mining and focused almost entirely on accumulating and staking Ethereum. However, this strategy caused serious fluctuations in the company’s income statement, and the gap between operational income and expenses became even deeper.
Derivative transactions and portfolio composition
In the company’s last public report, derivative product positions that were not previously mentioned were included for the first time. In the first quarter of 2024, unrealized losses from derivative transactions amounted to $65.3 million. It was stated that 24.1 million dollars of premium income was obtained from the options sold in the same period. This table shows that the company is seeking to create additional returns through options and similar complex strategies on ether assets.
At the end of February, it was announced that the company had $879.6 million in cash in its safe, as well as 198 bitcoins in its portfolio, $200 million worth of shares in Beast Industries and $85 million worth of investments in Eightco Holdings.
Tom Lee, Bitmine’s executive chairman, said in March that the recent decline in ethereum prices “presents an attractive opportunity in light of improving fundamentals.” It was also announced that purchases have accelerated since the beginning of April.
