BitMine Immersion Technologies is preparing to stop buying Ethereum after reaching a hard cap of 5% of ETH’s total supply. The company currently holds more than 6 million ETH and needs about 88,586 more tokens to reach the target.
Following the news, Ethereum fell nearly 5% as BitMine shifted its strategy from buying more ETH to earning yield from its existing holdings.
BitMine Sets 5% Hard Cap on ETH Holdings
Speaking at the Token2049 conference, BitMine Chairman Tom Lee confirmed that BitMine will not accumulate more than 5% of Ethereum’s total supply.
“That’s a hard cap. We’re not gonna be accumulating past 5%.”
As of now, BitMine holds 6,016,414 ETH, equal to about 4.9% of Ethereum’s circulating supply of 122.1 million ETH.
The company needs another 88,586 ETH, worth about $240 million, to reach the 5% target.
BitMine’s total corporate holdings are valued at around $17.4 billion, including its ETH treasury, $643 million in cash and stakes in Beast Industries and Eightco Holdings.
Why Is BitMine Stopping Its ETH Buying?
The decision ends BitMine’s 15-month “Alchemy of 5%” accumulation plan. Chairman Tom Lee said the company built its ETH position while the market was under pressure.
“We did all this buying in a bear market. We protected the downside for ETH because we were buying. But now, we’re done stacking in front of a 25X move.”
With its buying phase ending, BitMine will now focus on earning income from the ETH it already owns.
BitMine Shifts From ETH Buying to Staking
BitMine has already placed 5,067,309 ETH, or about 84% of its treasury, into staking.
Through its Made in America Validator Network (MAVAN), the company is earning a 7-day annualized yield of 2.63%. Based on its current holdings, BitMine projects around $363 million in annual staking revenue.
The new strategy also reduces the need to keep raising funds or issuing equity to expand its ETH holdings.
ETH Price Drops 5% After Buying Halt
Following the announcement, Ethereum fell 5% to $2,585.94, adding pressure to the market as BitMine prepares to end its aggressive ETH buying.
The sharp drop also triggered $216.56 million in ETH liquidations, with 97% coming from long positions.
The next major catalyst is progress on Ethereum’s Glamsterdam upgrade and Hoodi testnet.
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