faster over the past four weeks. Bitmine lost $3.8 billion in a single quarter and isn't slowing down. The company - which has transformed from a Bitcoin mining operation into a leveraged Ethereum treasury - reported a Q1 net loss of $3.8 billion on Tuesday. The loss came from fair-value accounting rules that require companies to mark their crypto holdings to market each quarter, and Ethereum fell sharply during Q1.
Bitmine holds 4.87 million ether at an average cost of $2,206 per token, controlling nearly 5% of all ether in circulation as the world's largest corporate ETH holder.
The company doubled its share count in six months and raised more than $10 billion to fund its buying spree. Chairman Tom Lee called the pullback "attractive, given the strengthening fundamentals" and said Bitmine has sped up purchases over the last four weeks. How It Makes Money (For Now) Bitmine's business has shifted almost entirely to staking - locking up ETH to help secure the network in exchange for rewards. About 3.33 million of its ether, roughly 68%, is staked, generating nearly all of the company's $11 million in quarterly revenue. General and administrative expenses hit $75 million for the quarter, meaning the operating business alone isn't close to covering costs.
Bitmine is running the same playbook MicroStrategy used with Bitcoin - using debt and stock to accumulate as much of the asset as possible. It works when the price goes up and looks painful when it doesn't. The $3.8 billion loss is on paper, but the strategy only works if ETH recovers.