Short Seller Kerrisdale Targets Tom Lee’s BitMine, Calls Model ‘Extinct’

Shares of BitMine Immersion Technologies (BMNR) swung sharply on Wednesday after short-selling firm Kerrisdale Capital announced a bearish position against the crypto treasury company, calling its business model “a relic on the verge of extinction.”

Kerrisdale’s report criticized BitMine’s strategy of selling stock to purchase Ether (ETH) and grow its tokens-per-share metric, arguing that the approach no longer justifies the company’s premium valuation.

The firm said BitMine’s market value is now converging with the underlying value of its crypto holdings, diminishing its appeal to investors.

BitMine Becomes World’s Largest Public Ethereum Holder

BitMine, once a traditional Bitcoin miner, pivoted earlier this year to become the world’s largest public holder of Ethereum, amassing billions worth of ETH.

Kerrisdale estimated that BitMine’s balance sheet holds about nine ETH per 1,000 shares, but warned that “the playbook of issuing shares to buy tokens has reached its limit.”

Despite the scathing critique, BitMine’s stock managed to close 1.35% higher at $60, recovering from an early 5% dip to $57.41. Shares rose another 0.4% after hours.

Kerrisdale, known for targeting overvalued crypto-related firms, has previously shorted Riot Platforms and Strategy (Michael Saylor’s Bitcoin-buying firm).

Riot dismissed Kerrisdale’s findings as “unsound,” while Strategy ignored the report, with Saylor continuing to champion the firm’s aggressive Bitcoin strategy.

In its latest note, Kerrisdale accused BitMine of excessive stock dilution, pointing to $10 billion in new share offerings over the past three months.

“Every rally is met with more supply,” it said, describing the company’s $365 million September raise as “a discounted giveaway disguised as a premium deal.”

The report also took aim at executive chairman Tom Lee, saying that while his reputation brings visibility, “he lacks the cult-like magnetism of Michael Saylor.”

It added that BitMine’s model “needs scarcity, charisma, and innovation — none of which it currently offers.”

Kerrisdale concluded that its short position is “not a bet against Ethereum, but against the notion that investors should pay a premium for exposure they could easily replicate.”

“If you want ETH,” the firm wrote, “just buy it directly, stake it, or invest through one of the new ETFs. BitMine’s middleman pitch has run its course.”

Institutions and ETFs Now Hold 12.5M ETH

Institutional demand for Ethereum is hitting new highs, with treasury firms and exchange-traded funds now holding over 12.48 million ETH, roughly 10.31% of the network’s total supply.

According to data from StrategicETHReserve, corporate treasuries hold about 5.66 million ETH (4.68% of supply), while spot Ethereum ETFs have amassed another 6.81 million ETH (5.63%).

The figures underscore a growing shift among institutions toward Ethereum as a productive asset, mirroring the corporate Bitcoin accumulation trend seen in recent years.

October saw US-listed spot Ether ETFs record net inflows of $621.4 million, more than doubling September’s $285.7 million, per SoSoValue.

In August, inflows peaked at $3.9 billion, suggesting a sustained appetite for Ethereum exposure.

One standout example is SharpLink Gaming, which revealed this week it now holds 839,000 ETH with no debt on its balance sheet.

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