Author: Cubone Wu on Blockchain
U.S. listed company BitMine Immersion Technologies (BMNR) is attempting to replicate a MicroStrategy-like path—using equity financing to rapidly increase its Ethereum holdings and transform its balance sheet into an 'ETH treasury'. After announcing the transformation, the stock price initially surged, then fell sharply and entered a period of range oscillation; subsequently, driven by holding and financing progress, it surged again, only to see a pullback. Meanwhile, due to the continuous execution of ATM issuances, the circulating equity is constantly expanding, and the market value is dynamically expanding in accordance with the issuance rhythm. This article focuses on BMNR's own structure: can this 'exchange stock for coin' reflexive flywheel operate in the long term? When mNAV (EV/ETH, where EV = Market Value + Interest-Bearing Debt - Cash) premiums converge and secondary market absorption weakens, will it switch from 'per-share enrichment' to 'net dilution'? The following summarizes its key risks based on public disclosures and on-chain data.
Core data: ETH reserves, equity, and premium levels
First, let's look at the fundamental data of BMNR. As of mid-August 2025, BMNR has held approximately 1.297 million ETH, valued at about 5.77 billion USD at that time. This scale makes BMNR the third largest crypto asset reserve company in the world, second only to MicroStrategy and MARA. The circulating capital is approximately 173.5 million shares. In terms of stock price, it rose from a low of 30.30 USD to a high of 71.74 USD during August (an increase of about 136.8%), and then fell back to a closing price of 57.81 USD on Friday (up 90.8% from the low point but down about 19.4% from the high), corresponding to a market value of approximately 10.03 billion USD. According to mNAV = (Market Value + Debt - Cash) / ETH Holding Market Value and calculated based on Friday's closing price (Market Value 10.03 billion USD, Debt approximately 1.88 million USD, Cash approximately 1.47 million USD, ETH Holding Market Value approximately 5.77 billion USD), mNAV is approximately 1.74.
The strength in early August was mainly driven by a series of catalysts: the listing of stock options on July 23 improved the accessibility of trading and hedging tools, the board approved a maximum 1 billion USD buyback plan on July 29, disclosure on August 4 showed holdings exceeded 833,137 ETH, and disclosure on August 11 showed holdings exceeded 1,150,263 ETH, leading to continuous upward revisions of market expectations regarding the 'exchange stock for coin' rhythm. The subsequent retraction was primarily driven by the phase-over expansion of the premium (measured by mNAV) triggering a mean reversion of valuation to NAV, accelerated by the resonance of rising ATM supply expectations and weakened secondary market absorption, compounded by the ETH correction.
Structural mechanism: options leverage and mNAV premium flywheel
The company disclosed in mid-July that its holding of approximately 60,000 ETH comes from options that are already in the money and backed by approximately 200 million USD of unencumbered cash on a 1:1 basis; however, thereafter, the official disclosure was adjusted to total ETH holding data counted in 'tokens' (e.g., 833,137 coins on August 4, 1,150,263 coins on August 11), and 'including options' was no longer separately listed, nor was there an independent announcement of the completion of option exercise. Based on current information, there is no clear official document announcing that the exercise has been completed. However, combining the changes in disclosure and corresponding cash capabilities, as well as the holding rhythm, it is highly likely that these 60,000 ETH were converted to spot after July 17 through exercise or equivalent spot substitution, and it will ultimately require confirmation in the next quarterly report or in the derivative notes of the 8-K.
The core of BMNR lies in its mNAV (Market Net Asset Value multiple) driven reflexive flywheel mechanism: when the stock price P is higher than the net asset value NAV per share (i.e., mNAV > 1), the company can use the ATM mechanism for additional financing within the premium range and use the funds obtained to purchase ETH, thereby increasing the ETH holdings per share, resulting in book enrichment (accretion). In theory, as long as P > NAV is maintained, each financing will push up the per-share asset value. However, the essence of this model is a structural equity redistribution: even if there is a premium, if the market questions the logic of 'continuously exchanging coins to achieve enrichment', the behavior of issuing new shares may be revalued as a dilution action, thereby suppressing the overall valuation level.
In the positive operation phase of the flywheel, its path is: mNAV upward → ATM financing → increasing ETH holdings (ETH per share rises) → market narrative reinforcement and valuation uplift → further financing, 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, ETH price decline, weak secondary market absorption, or rising expectations for ATM share issuance. Once market expectations switch, the flywheel mechanism will shift from 'enrichment' to 'dilution', forming negative feedback. In this scenario, companies often need to hedge dilution effects through buybacks to maintain stable per-share metrics, but their execution ability will be practically constrained by unrestricted cash reserves and the speed of financing arrival.
Therefore, the sustainability of this model depends on three key factors: first, the market's trust in the logic of its ETH treasury and the pricing basis of asset premiums; second, the ongoing support of the ETH price; third, the company's internal execution efficiency, covering key operational aspects such as ATM signing and fund arrival rhythm, large-scale ETH OTC procurement capabilities, and the reinvestment mechanism for staking returns.
Potential collapse trigger mechanisms: four major risk alerts
Although BMNR is gaining momentum, the inherent fragility of its model determines that a stampede-like collapse may occur under extreme conditions. The following four major risk paths are worthy of investor vigilance:
1. Severe price correction of ETH
The valuation of companies like BMNR, which are 'ETH treasury-type', is highly anchored to the spot value of ETH they hold, and a decline in ETH will simultaneously depress the net asset value (NAV) per share and the market value premium multiple (mNAV). If ETH experiences a correction after issuance in the premium range, it may trigger a 'dual kill' of valuation foundation and market narrative, amplifying declines and exacerbating liquidity outflows, causing rapid shrinkage in market value.
2. mNAV premium convergence and financing chain break
The flywheel mechanism currently relied upon by BMNR is based on high mNAV premiums, and once this premium converges or even falls below 1, the space for further issuance will be blocked, falling into a predicament of difficult dilution. If it fails to timely shift to buybacks, reinvestment of staking returns, and other methods to stabilize metrics, the market will interpret it as a shutdown of growth logic, triggering a reversal in secondary market sentiment and accelerating price retraction.
3. Liquidity tightening and regulatory uncertainty
As a small- and mid-cap stock, BMNR's absorption capacity in the primary market is limited, and financing efficiency is highly dependent on market sentiment and macro liquidity conditions. Additionally, the asset allocation behavior of ETH treasury-type assets is still in a regulatory gray area. If it is defined in the future as 'similar to ETF', 'structured derivative holdings', or 'non-operational financial operations', it may face upgraded information disclosure obligations, trading restrictions, or more stringent regulatory frameworks, impacting its valuation foundation and financing channels.
4. Risk of trust overdraw in shell company structures
BMNR and most ETH treasury stocks are small- and mid-cap shell companies with stagnated businesses or on the brink of delisting, lacking a sustainable revenue and profit base before strategic transformation, and their valuation is highly dependent on narrative-driven momentum and financing through share issuance. This structure is highly analogous to the ICO model: packaging a strong narrative, exchanging ETH through shares/tokens, building a short-term high valuation, but in the event of ETH correction or financing obstacles, it will fall into a trust collapse due to lack of business support and valuation anchoring.
Once trust recedes, market preferences reverse, or regulation tightens, companies under shell structures lacking actual cash flow and sustainable profit models will face extreme risks of instantaneous liquidity depletion and nonlinear valuation collapse.
Conclusion: The boundaries of the reflexive flywheel will ultimately be determined by trust
BMNR's path represents a new type of business narrative that integrates capital structure with crypto assets. Through the mNAV flywheel mechanism, it rapidly amplifies valuation in a bull market environment, achieving reflexive reinforcement between 'equity - coin standard - market value'; at the same time, it deeply binds the volatility of ETH, market sentiment, and regulatory uncertainty within the company structure.
This structure exhibits high leverage and rapid growth characteristics in the upward cycle, while in the downward cycle, it also has the potential for accelerated failure. ETH declines, premium regression, cooling secondary markets, and ineffective additional issuance—these variables, which in isolation do not constitute fatal risks, may amplify due to the reflexive mechanism's interlinkage, ultimately triggering nonlinear collapse. More critically, as a micro-strategy company transformed from a shell structure, its core value does not stem from operational capability or on-chain productivity, but is based on market expectations of its 'continuously enriching ETH and creating per-share value'. If this expectation is difficult to self-verify or even faces counter-evidence, the foundation of trust may collapse instantaneously, and the flywheel mechanism will be hard to sustain.
Looking back at the collapse after the ICO boom, the market does not lack memories of structural faith fractures. The difference is that this time the 'shell' comes from a U.S. listed company; but the similarity lies in the fact that under the premise of lacking internal cash flow and real business support, any mechanism of 'exchanging assets for trust' will ultimately struggle to escape the test of time. Whether BMNR can survive in the long run does not depend on how much ETH it can buy, but on whether it can prove itself to be an 'asset manager' with execution power based on 'coin standard', rather than merely relying on valuation narrative-driven shell-like conduits.
