Q3 Derivatives Losses Offset Validator Revenue
BitMine generated $46 million in Ethereum staking revenue during fiscal Q3 2026, but a $92.1 million options loss on derivatives erased the gains and pushed the company to an $83.6 million net loss for the quarter.
The company’s staking and validation revenue reached $45.7 million, representing 98% of total quarterly revenue of $46.5 million. However, losses on Ethereum-linked derivatives dominated the quarter’s financial performance. BitMine recorded $78.6 million in losses from expired option contracts and $14 million from exercised option positions, partially offset by $534,000 in gains on open contracts.
BitMine said its strategy consisted primarily of selling put options as part of its broader treasury-management program. The nine-month derivative losses totaled $133.3 million, comprising $79.3 million from exercised contracts and $54.5 million from expired positions, against $515,000 in gains on open contracts.
Massive Share Dilution Funds ETH Accumulation
To fund aggressive Ethereum purchases, BitMine issued 340.7 million shares through an at-the-market offering program over nine months, diluting shareholders by 149%. Outstanding shares grew from 232.4 million on August 31, 2025, to 579.7 million by May 31, 2026, and reached 603.2 million by July 9, 2026.
The company raised $11.87 billion in proceeds after issuance costs and deployed $11.69 billion to purchase Ethereum. By quarter-end, BitMine held 5.42 million ETH with a cumulative cost basis of $19.05 billion. The position carried an $8.2 billion unrealized loss, trading 43% below cost.
In January 2026, shareholders approved an increase in authorized common shares from 500 million to 50 billion, enabling the aggressive issuance program.
Ethereum Tower Fees Consume Over a Quarter of Staking Revenue
BitMine paid $12.8 million in quarterly expenses under its consulting agreement with Ethereum Tower, a third-party provider handling asset management, custody, and staking services. That represented 28% of staking revenue for the quarter. Nine-month expenses under the agreement totaled $37.5 million, with BitMine expecting $40 million to $50 million in annual costs.
The contract includes a punitive termination clause: BitMine faces an 85% penalty fee if it exits the agreement without cause. Ethereum Tower also received 2% membership interest in MAVAN, the validator platform BitMine acquired through its purchase of Pier Two.
Balance Sheet and Preferred Equity Raise
BitMine reported $11.63 billion in assets as of May 31, 2026, against $30.1 million in total liabilities. The company held $340.3 million in cash and $433.1 million in working capital. Operating activities consumed $287.6 million in cash over the nine-month period.
In the quarter following the fiscal period, BitMine sold 3.5 million perpetual preferred shares, raising $273.8 million after expenses. The preferred stock carries a 9.5% dividend rate, creating $33.25 million in annual dividend obligations.
General and administrative expenses surged to $37.3 million in Q3, compared to $744,000 in the prior-year quarter. The adjusted net loss on a non-GAAP basis was $70.8 million. Over nine months, BitMine reported a total net loss of $9.1 billion, driven by a $9.04 billion unrealized digital-asset loss.
Frequently Asked Questions
How much did BitMine lose on options in Q3 2026?
A $92.1 million options loss on derivatives in fiscal Q3 2026 erased BitMine's $46 million staking revenue and drove an $83.6 million net loss for the quarter.
How much Ethereum does BitMine hold and at what cost?
By quarter-end BitMine held 5.42 million ETH with a cumulative cost basis of $19.05 billion, carrying an $8.2 billion unrealized loss and trading 43% below cost.
What does BitMine pay Ethereum Tower?
BitMine paid $12.8 million in quarterly expenses to Ethereum Tower for asset management, custody, and staking, equal to 28% of staking revenue, and faces an 85% penalty fee to exit without cause.
