Summary BitMine Immersion Technologies has rapidly accumulated over 2.15 million ETH, now holding nearly $10 billion in digital assets. BMNR's aggressive share issuance strategy has significantly increased ETH per share, offsetting dilution concerns and driving strong stock performance. At current prices, BMNR's valuation closely matches its asset value, leading to a reassessment from 'sell' to 'hold.' A key risk remains a potential shift from NAV premiums to discounts, which could pressure both BMNR and the broader digital asset market. Back in mid-July, I initiated coverage of BitMine Immersion Technologies ( BMNR ) with a 'sell' and cited two main concerns; dilution and valuation. From the closing section of that piece: In no world does this valuation for BNMR make sense. The company closed July 16th trading at nearly 6x the liquidation value of the claimed ETH assets. That 'sell' call looked good through the end of July and early August. However, fast forward two months, it's clear I got it wrong: Data by YCharts Since the publishing of that article, BMNR shares have returned better than 57%. More importantly, they're beating spot Ethereum ( ETH-USD ) ETFs like the Fidelity Ethereum ETF ( FETH ). In this update, we'll look at how much ETH BitMine has amassed in just two months as well as how much ETH each share of BMNR now represents. BitMine Has Been Gobbling All The ETH When I covered the company in July, BitMine only had about $500 million in Ethereum. As of September 18th, the company is holding over 2.15 million ETH: BitMine ETH Holdings (Strategic ETH Reserve) Not only is BitMine now sitting on an ETH treasure trove worth nearly $10 billion, but it is quickly closing in on 2% of ETH's outstanding supply. The company is aiming for 5% of total supply and has achieved just over a third of its goal. But the biggest thing that stands out to me in BitMine's ETH accumulation is that the company is the clear standout in its quest to be the 'Strategy ( MSTR ) of Ethereum.' SER DAT Supply Held ( The Block ) There are a little over a dozen companies that qualify as 'SER' DATs - or Strategic ETH Reserve Digital Asset Treasuries. Only six or so have what I would call meaningful ETH positions, and of those six, BitMine is clearly winning this race to be the top ETH holder in the public markets. ETH Per Share Looking at the company's ETH per share estimates, it's hard to argue with BitMine's issuance strategy. As I laid out in my July piece, due to the low float of the stock and the hype surrounding the name, BMNR shares traded at roughly 6x the company's actual ETH holdings. Following the approach set forth by Strategy and Michael Saylor, BitMine issued new shares from its ATM in conjunction with that premium: Date July 14th September 14th Change ETH 163,142 2,151,676 1,218.9% Shares Outstanding 65,000,000 173,500,000 166.9% ETH per Share 0.0025 0.0124 394.1% Closing Share Price $41.02 $55.09 34.3% Source: Analyst's estimates and calculations. Share prices per Seeking Alpha As I calculated it back in July and based on updated share estimates, the BMNR shares outstanding have ballooned by 167% in just 2 months. Yet, the number of ETH held by the company has rocketed by 1,219%. So even though the dilution has been enormous, the ETH backing per share has grown by almost 400%. This helps explain why BMNR has performed well despite the dilution. Assets As Of Mid-September In a press release from September 15th, BitMine disclosed holdings of 192 Bitcoin ( BTC-USD ), $214 million in Eightco ( ORBS ) and cash of $569 million. This is, of course, in addition to the 2.15 million ETH previously discussed. But the company's asset table currently looks like this: Asset Units Valuation ETH 2,151,676 $9,897,709,600 BTC 192 $22,003,200 ORBS 13,700,000 $182,000,000* Cash $569,000,000 Total $10,670,712,800 Source: BitMine, Analyst's calculations at $117.6k BTC and $4,600, *as of intraday ORBS price on 9/18 Given BitMine's holdings have a total valuation of $10.7 billion, I think it could be reasonably argued that the stock was actually undervalued at the September 17th closing price of $57. As of article submission on September 18th, shares are trading for $61 - this implies a $10.6 billion valuation and is far more in line with the value of the assets that the company holds. Key Risk The biggest risk I see to BitMine, and all DATs for that matter, is the possibility of a reverse flywheel where DAT mNAV premiums shift to discounts. There could conceivably be scenarios where prudent DAT balance sheet management favors selling digital assets to defend the stock price. I don't think we're there yet, but we can already see instances of sub-1 mNAVs for both Bitcoin and Ethereum Treasury companies. The broader implications of a reverse flywheel could also be quite bad for the Digital Asset market in general since so much supply is now held in easily tradeable, liquid securities. Final Takeaways I will fully admit, what BitMine has pulled off is impressive. My concerns about valuation are no longer present. The company has quite masterfully executed the Strategy approach to accumulating ETH and has done so by simply issuing more common shares. I will also admit that I'm floored that this continues to work. I was wrong on BMNR. To this point, the company is the clear winner in the race to acquire ETH, and it is now valued fairly in my view. In the event that ETH goes down in price, BMNR will not be immune. But given the valuation relative to the company's assets, I think the downside is limited so long as ETH doesn't decline. I'm upgraded to 'hold.'
