Last week, the cryptocurrency market witnessed active buying activities from two major investment organizations, BitMine (focused on Ethereum) and Strategy (focused on Bitcoin), despite market conditions facing fluctuations and challenges regarding internal valuations.
BitMine Capitalizes on Discount Opportunities, Reaches Nearly 3% Ownership of ETH Supply
#Bitmine , an investment company focused on Ethereum, has had a record buying week. Specifically, the company purchased an additional 110.301 ETH, equivalent to about 380 million USD at market price.
BitMine CEO, Tom Lee, stated that the sharp decline in Ethereum last week provided a golden opportunity. He revealed that the company had accumulated 34% more Ethereum than usual thanks to this drop, emphasizing the strategy of 'buying the dip.'
After this purchase, the total holdings of BitMine have exceeded 3.5 million ETH, with an average purchase price of 3.639 USD/ETH. Notably, this amount of ETH is equivalent to BitMine owning up to 2.9% of the current total Ethereum supply. The company's strategic goal remains to expand ownership to 5% of the global ETH supply.
The total net asset value (NAV) of BitMine currently stands at 13.2 billion USD, of which Ethereum makes up the majority.
Concerns About Valuation and NAV
Although accumulating ETH is a long-term bullish signal, a worrying point is emerging in the company stock investment community:
Assets Close to Market Capitalization: The value of ETH held by BitMine is currently almost equal to the company's market capitalization (at nearly 12 billion USD).
Risk of NAV Touching 1: This raises concerns that the Net Asset Value (NAV) per share of BitMine is approaching 1. When the NAV touches 1, it means that the company's stock is being valued at par with the crypto asset value it holds.
According to institutional investment theory, shares of trust funds or investment companies are often expected to trade at a premium compared to NAV, reflecting confidence in management ability and investment strategy. If BitMine cannot maintain NAV above 1, the company will face significant pressure from stock investors:
Halting the Accumulation Strategy: The company may be forced to halt its weekly ETH accumulation strategy.
Selling Some Assets: In fact, BitMine may have to sell part of its ETH holdings to create a positive gap again between market capitalization and asset value, thereby reassuring stock investors.
Although Tom Lee and BitMine are committed to a long-term strategy, pressure from the stock market may force them to temporarily adjust the accumulation strategy to protect stock investors.
Strategy Continues to Buy More Bitcoin Despite Volatility
Alongside BitMine, billionaire Michael Saylor's company #strategy has announced its latest weekly Bitcoin purchase transaction. The company purchased an additional 487 BTC, equivalent to 49.9 million USD.
The total amount of Bitcoin held by Strategy is currently 641.692 BTC, with a total value of approximately 68 billion USD, and an average purchase price of ~74.079 USD/BTC.
This purchase occurred when the price of BTC, after sharply dropping to the 99,000 USD range last week, clearly rebounded to 106,000 USD, thanks to the prospect of the U.S. Senate reaching a short-term agreement to reopen the federal government. Strategy's move demonstrates absolute commitment to the Bitcoin accumulation strategy, regardless of short-term price fluctuations or pressure from macro political issues.
