Bitmine Halts ETH Purchases at 4.8% Supply, Pivots to Staking

Bitmine, the largest corporate holder of Ethereum tokens, will slow its token purchases as holdings approach 5% of the network’s supply, marking a strategic shift away from the rapid accumulation that defined the past year.

The company holds 5.7 million ETH, representing 4.8% of total supply. In a July message, Bitmine Chairman Thomas Lee stated the rationale for the pause: “At the moment, I think we shouldn’t try to accelerate and have more concentration beyond 5%.”

Lee said the company will redirect capital toward staking infrastructure, ecosystem investments, and financial-services ventures. “We just want to strengthen the Ethereum ecosystem, which in turn helps the price of Bitmine,” Lee said.

Staking and Validator Operations

Bitmine operates validators and collects staking rewards on proof-of-stake Ethereum. For the three-month period ended May 31, the company reported $45.7 million in staking and validation revenue. The company acquired Pier Two, a staking operator, which contributed $3.5 million in revenue during the same period.

Bitmine launched native staking in November of the prior year and operates MAVAN, its Made in America Validator Network.

Ecosystem Investments

Bitmine has led investments in ETH Labs, Ethereum Institutional, and ETH Systems. The company is also investing in Robinhood Chain, an Ethereum layer-2 network that recently surpassed Ethereum in daily decentralized-exchange volume.

Layer-2 networks can process activity while paying relatively small fees to Ethereum, reducing the need for users to hold ETH directly. Lee acknowledged this tension: layer-2 networks and stablecoins could allow users to transact without holding ETH directly, potentially undermining the thesis that institutions will need meaningful ETH balances as working capital.

Capital Structure and Market Position

Bitmine moved to the New York Stock Exchange and was included in the Russell 1000 index. In June, the company issued BMNP, a perpetual preferred security, at $80 per share. At the time of Lee’s presentation, BMNP had risen to approximately $86, reflecting a 9.5% yield.

Bitmine’s stock correlation with Ethereum is approximately 90%, indicating investors treat it as a cryptocurrency proxy. Owning 5% of ETH would not give Bitmine control over Ethereum, which operates as a decentralized network.

Lee referenced two price scenarios in his remarks: $25,000 and $75,000 per ETH. Joseph Lubin, Ethereum co-founder, and Etherealize cited an ETH price estimate of $250,000.