BitMine Immersion Technologies is now sitting on approximately $6 billion to $8 billion in unrealized losses after Ethereum (ETH) fell below $2,000 on Thursday, putting the largest Ethereum-focused treasury company deep underwater on its massive cryptocurrency bet.
The firm, led by Wall Street strategist Thomas Lee, accumulated 4.285 million ETH at an estimated cost of $15.65 billion.
That position is now worth approximately $9 billion at current prices. BMNR stock has fallen 88% from its July peak.
What Happened
BitMine holds approximately 3.55% of Ethereum's circulating supply. The company acquired its holdings through equity issuance rather than debt financing.
BMNR shares dropped to fresh multi-month lows Thursday as Ethereum extended its decline.
The stock has tumbled alongside Ethereum's 30% drop over the past month. The company has staked approximately 2.9 million ETH, generating an estimated $188 million in annualized staking revenue.
BitMine holds $538 million in cash and has continued accumulating ether during the downturn, adding 41,788 ETH last week.
Lee defended the losses on social media, writing that unrealized losses during market downturns are "not a bug, but a feature" of an Ethereum treasury strategy.
He compared the situation to index exchange-traded funds that post losses during broad market declines.
Read also: JPMorgan Says Bitcoin More Attractive Than Gold Despite 40% Drop
Why It Matters
BitMine faces no immediate pressure to liquidate because it used equity rather than borrowed funds for purchases.
The company has no debt covenants requiring asset sales at specific price levels.
Lee argued that Bitcoin and Ethereum remain in a deleveraging phase following October's market liquidations.
He pointed to capital rotation into precious metals as a factor weighing on prices.
The company's position represents a bet that Ethereum's long-term fundamentals will outweigh current price weakness.
Critics including investor Ross Gerber have called the strategy potentially "the worst trade ever" given the magnitude of losses.
Read next: Over $2.5B In Crypto Options Expire Friday As Bitcoin Tests $66,7K