Author | Cubone Wu Says Blockchain
US-listed company BitMine Immersion Technologies (BMNR) is attempting to replicate a MicroStrategy-like path — rapidly increasing its holdings of Ethereum through equity financing to transform its balance sheet into an 'ETH treasury.' After the transformation announcement, the stock price surged, followed by a significant pullback and a period of range-bound oscillation; subsequently, driven by progress in holdings and financing, it surged again and then retraced. Meanwhile, due to continuous ATM issuance, the circulating share capital has been continuously amplified, and the market value dynamically expands with the issuance rhythm. This article focuses on BMNR's own structure: can this reflexive flywheel of 'exchanging shares for currency' operate sustainably in the long term? When the mNAV (EV/ETH, where EV = market value + interest-bearing debt - cash) premium converges and the secondary market's acceptance weakens, will it switch from 'per share increase' to 'net dilution'? The following sections will analyze its key risks based on publicly disclosed information and on-chain system analysis.
Core data: ETH reserves, equity, and premium level
First, let's look at BMNR's fundamental data. As of mid-August 2025, BMNR held approximately 1.297 million ETH, valued at about $5.77 billion at the then market price. This scale makes BMNR the third largest crypto asset reserve company in the world, following MicroStrategy and MARA. The circulating share capital is approximately 173.5 million shares. In terms of stock price, it rose continuously from a low of $30.30 in August to a peak of $71.74 (an increase of about 136.8% during the range), and later pulled back to a Friday closing price of $57.81 (still up 90.8% from the low point, down about 19.4% from the peak), corresponding to a market value of approximately $10.03 billion. Based on mNAV = (market value + debt - cash) / ETH holding market value and calculated based on Friday's closing price (market value $10.03 billion, debt approximately $1.88 million, cash approximately $1.47 million, ETH holding market value approximately $5.77 billion), mNAV is about 1.74.
The strengthening in early August was primarily driven by a series of catalysts: the listing of stock options on July 23 enhanced the accessibility of trading and hedging tools, the board approved a buyback plan of up to $1 billion on July 29, the disclosure of holdings exceeding 833,137 ETH on August 4, and the revelation of holdings surpassing 1,150,263 ETH on August 11 led to continuous upward revisions in market expectations for the 'exchange of shares for currency' rhythm. The subsequent pullback was mainly driven by a valuation regression to NAV caused by a temporary excessive expansion of the premium (measured by mNAV), accelerated by the rise in ATM supply expectations and the weakening of secondary market absorption, compounded by ETH's pullback.
Structural Mechanism: Option Leverage and mNAV Premium Flywheel
The company disclosed in mid-July that its approximately 60,000 ETH holdings came from options that were already in-the-money, backed by about $200 million of unencumbered cash on a 1:1 basis; however, subsequent official disclosures adjusted the figures to report total ETH holdings in 'tokens' (for example, 833,137 ETH as of August 4 and 1,150,263 ETH as of August 11), without separately listing 'including options' and not issuing an independent announcement regarding the completion of option exercises. Based on current information, there is no clear official document announcing the completion of the exercise. However, based on the changes in disclosure criteria, corresponding cash capabilities, and cadence of holdings, it is highly likely that the 60,000 ETH has been converted to spot after July 17 through exercise or equivalent means, which will ultimately still need confirmation in the next quarterly report or in the derivatives notes of the 8-K.
The core of BMNR lies in its reflexive flywheel mechanism driven by mNAV (market net asset value multiple): when the stock price P is higher than the net asset value NAV per share (i.e., mNAV > 1), the company can issue additional shares through the ATM mechanism within the premium range to raise funds, which are then used to purchase ETH, thereby increasing the per share ETH holdings and enhancing the book value (accretion). Theoretically, as long as P > NAV is maintained, each financing round will push up the per share asset value. However, the essence of this model is a structural equity redistribution: even if a premium exists, if the market questions the logic of 'sustained currency exchange to achieve increases,' the issuance behavior may be repriced as dilution, thus suppressing the overall valuation level.
During the positive operation phase of the flywheel, its path is: mNAV up → ATM financing → increase ETH (per share ETH rises) → market narrative strengthens and valuation rises → financing again, forming a positive feedback loop. Conversely, the failure of this mechanism may be triggered by the following factors: mNAV converging to 1 or below 1, decline in ETH price, weakness in secondary market absorption, or rising expectations of ATM additional issuance supply. Once market expectations shift, the flywheel mechanism will switch from 'increasing' to 'diluting,' forming negative feedback. In this scenario, the company often needs to use buybacks and other means to hedge against dilution effects to maintain stable per share metrics, but its execution capability will be practically constrained by unencumbered cash reserves and the speed of financing arrivals.
Thus, the sustainability of this model depends on three key factors: first, the market's trust in its ETH treasury logic and the pricing basis of asset premiums; second, the continued supportive role of the ETH price itself; and third, the company's internal execution efficiency, covering key operational aspects such as ATM contracting, timing of fund arrivals, capacity for bulk ETH OTC purchases, and mechanisms for reinvesting staking yields.
Potential Collapse Trigger Mechanism: Four Major Risk Alerts
Although BMNR is currently in a strong position, the inherent fragility of its model means that under extreme conditions, a stampede-like collapse could occur. The following four major risk paths deserve close attention from investors:
(1) Severe Pullback in ETH Price
The valuation of companies like BMNR, which are 'ETH treasury-type', is highly anchored to the spot value of the ETH they hold. A decline in ETH will simultaneously lower both the net asset value (NAV) per share and the market value premium multiple (mNAV). If additional shares are issued within the premium range and ETH subsequently pulls back, it may trigger a 'double whammy' on valuation basis and market narrative, amplifying the decline and exacerbating liquidity outflows, resulting in a rapid shrinkage of market value.
(2) Convergence of mNAV Premium and Breakdown of Financing Chain
The current flywheel mechanism relied upon by BMNR is built on a high premium of mNAV. Once this premium converges or even falls below 1, the room for further issuance will be blocked, leading to a dilution dilemma that is difficult to sustain. If timely measures such as buybacks and reinvestment of staking yields are not taken to stabilize the indicators, the market will interpret it as the end of the growth logic, triggering a reversal in secondary market sentiment and accelerating price pullbacks.
(3) Liquidity Tightening and Regulatory Uncertainty
As a small and mid-cap stock, BMNR has limited absorption capacity in the primary market, and its financing efficiency highly depends on market sentiment and macro liquidity conditions. Furthermore, the asset allocation behavior of ETH treasury-type companies still exists in a regulatory gray area. If in the future, it is defined as 'similar to ETFs,' 'structured derivative holdings,' or 'non-operational financial operations,' it may face upgraded information disclosure obligations, trading restrictions, or fall under stricter regulatory frameworks, impacting its valuation basis and financing channels.
(4) Trust Overdraft Risk of Shell Company Structure
BMNR and most ETH treasury stocks are small and mid-cap shell companies that lack sustainable revenue and profit foundations prior to strategic transformation, with valuations highly dependent on narrative-driven momentum and financing from additional share issuance. This structure closely resembles the ICO model: packaging a strong narrative, exchanging shares/tokens for ETH, and building short-term high valuations, but during an ETH pullback or financing blockage, it will fall into a trust collapse due to the lack of business support and valuation anchoring.
Once trust recedes, market preferences reverse, or regulations tighten, companies with shell structures lacking actual cash flow and sustainable profit models will face extreme risks of instantaneous liquidity depletion and non-linear valuation collapse.
Conclusion: The boundaries of the reflexive flywheel will ultimately be determined by trust.
BMNR's path represents a new business narrative that merges capital structure with crypto assets. Through the mNAV flywheel mechanism, it rapidly amplifies valuation in a bull market environment, achieving reflexive reinforcement between 'equity — currency-based — market value'; simultaneously, it deeply binds the volatility of ETH, market sentiment, and regulatory uncertainty within the company's structure.
This structure demonstrates high leverage and rapid growth characteristics during upward cycles, while also possessing the potential for accelerated failure during downward cycles. A decline in ETH, regression of premiums, cooling of the secondary market, and failure of additional share issuances — these variables, which should not constitute fatal risks, could amplify and compound due to the reflexive mechanism, ultimately triggering a non-linear collapse. More critically, as a micro-strategy company transformed from a shell structure, its core value does not stem from operational capabilities or on-chain productivity but is based on market expectations of 'continuously increasing ETH and creating per share value.' If this expectation proves difficult to self-verify, or even faces counter-evidence, the trust foundation may collapse instantly, making the flywheel mechanism difficult to sustain.
Reflecting on the collapse after the ICO tide receded, the market does not lack memories of structural faith breaking. The difference this time is that this 'shell' comes from a US-listed company; the similarity is that, in the absence of intrinsic cash flow and real business support, any mechanism of 'exchanging assets for trust' will ultimately struggle to withstand the test of time. Whether BMNR can sustain in the long term does not depend on how much ETH it can purchase, but rather on whether it can prove itself to be an asset manager with execution capability based on 'currency-based' principles, rather than merely relying on valuation narratives to drive a shell-like conduit.
