What Drove the Losses on BitMine’s Ether Holdings?
BitMine Immersion Technologies is facing mounting unrealized losses on its Ether holdings after the latest wave of crypto liquidations pushed prices sharply lower. The publicly traded crypto treasury firm increased its Ether exposure last week, acquiring an additional 40,302 ETH and lifting total holdings to more than 4.24 million ETH.
According to data from Dropstab, BitMine’s unrealized losses now exceed $6 billion. At current prices, the company’s Ether position is valued at roughly $9.6 billion, down from a peak near $13.9 billion in October. The drawdown reflects both the size of BitMine’s balance-sheet exposure and the speed of the broader market decline.
Ether slid toward $2,300 over the weekend as liquidations accelerated across derivatives markets. The move followed a period of thin liquidity, leaving large positions vulnerable once prices began to fall. For firms that have built crypto treasuries at scale, the episode has highlighted how quickly paper gains can reverse during sharp downturns.
Investor Takeaway
How Liquidity and Leverage Amplified the Sell-Off
Market observers pointed to fragile liquidity as a key factor behind Ether’s sudden drop. The Kobeissi Letter said the sell-off reflected a market structure stretched by leverage rather than a single macro shock.
“In a market where liquidity has been choppy at best, sustained levels of extreme leverage are resulting in ‘air pockets’ in price,” the publication said, adding that “herd-like” positioning intensified the move lower.
Those conditions tend to hit large holders hardest, especially when exposure is concentrated on balance sheets rather than distributed across active trading strategies. As prices slipped, forced liquidations cascaded through futures and perpetual markets, pulling spot prices lower and widening losses for long-term holders such as BitMine.
The episode echoes earlier liquidation events in crypto, where leverage builds quietly during periods of stability and then unwinds abruptly once prices break key levels. For treasury-style holders, the risk lies less in day-to-day volatility and more in sudden regime changes when liquidity dries up.
Tom Lee Warns of a Rough Start to 2026
The losses come as Tom Lee, a prominent crypto bull and investor linked to BitMine, has tempered expectations for the near-term market outlook. After earlier optimism around the end of 2025, Lee has said conditions have shifted, with 2026 likely beginning on a “painful” note before any recovery later in the year.
In a recent interview, Lee said the market is still absorbing the effects of deleveraging, even if longer-term fundamentals remain supportive. He pointed to the Oct. 10 crash, which erased about $19 billion in value across crypto markets, as a moment that reset risk appetite and forced participants to reassess leverage.
That reset has yet to fully run its course. While prices rebounded after the October shock, recent liquidation-driven moves suggest that positioning remains fragile, particularly in assets like Ether that are heavily used as collateral across decentralized finance and derivatives markets.
Investor Takeaway
What Needs to Change for a Durable Recovery?
Market maker Wintermute has argued that a sustained rebound in 2026 will depend on deeper structural support rather than short-term rallies. In a recent assessment, the firm said renewed strength in Bitcoin and Ether, broader participation through exchange-traded products, and wider adoption of digital asset treasury strategies would be needed to rebuild confidence.
Wintermute also pointed to the return of retail inflows as a missing ingredient. So far, retail interest has remained muted, with many investors drawn instead to faster-moving themes such as artificial intelligence and quantum computing. Without that demand, price recoveries have tended to stall once initial momentum fades.
For companies like BitMine, the path forward hinges on whether crypto markets can stabilize enough to reduce balance-sheet volatility. Until then, large Ether treasuries remain exposed to sharp valuation swings driven by liquidity conditions rather than changes in underlying usage or network activity.
