Bitmine's stock price skyrocketed 3,000% due to Ethereum reserve strategy

Led by Fundstrat's Thomas Lee, Bitmine Immersion (BMNR) saw its stock price soar over 3,000% in less than a week after announcing a $250 million raise to purchase Ethereum (ETH), becoming the latest crypto proxy stock. On Thursday alone, the stock price doubled, surpassing $140.

The targeted offering price was $4.50 per share, expected to be completed today, attracting several institutional investors including Founders Fund, Pantera, FalconX, Kraken, Galaxy Digital, and DCG. Bitmine initially focused on cryptocurrency mining using immersion cooling technology and held $16 million in Bitcoin prior to the fundraising.

The company is now repositioning itself as a way to indirectly access Ethereum through the stock market, similar to how MicroStrategy became a leveraged investment tool for Bitcoin.

However, investors should remain cautious. A similar situation occurred with Sharplink Gaming (SBET), which surged 4,000% after announcing a $450 million financing but saw its stock price plummet over 90% weeks later as the hype faded.