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Bitmine Adds More Ethereum as Tom Lee Flags Ongoing Market Pressure

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Highlights:

  • Bitmine bought 17,242 Ethereum, now holding 3.5 million worth over $10 billion. 
  • The company’s cofounder said the October crash crippled liquidity, which forced market makers to cut trading activity.
  • Lee noted crypto may need weeks to recover, similar to the 2022 unwinding period.

Bitmine has purchased an additional 17,242 Ethereum, valued at roughly $49 million, according to data shared by Onchain Lens on November 21. This move comes as the broader crypto market continues to face pressure from liquidity constraints. The firm now holds around 3.5 million Ethereum, worth more than $10 billion, making it one of the largest holders of the asset. 

Bitmine’s Long-Term Ethereum Strategy

Bitmine’s consistent accumulation places it just behind Michael Saylor’s Strategy in total cryptocurrency holdings, which shows a strong commitment to Ethereum despite recent market weakness. Bitmine used to be a mining company. Now, it wants to build a digital asset treasury. The company plans to hold about 5% of Ethereum long-term and will buy Ethereum using cash, raising money, and staking rewards. 

Bitmine buys most of its Ethereum through big trading desks like FalconX and BitGo. Bitmine saw the recent price drops as a chance to buy more Ethereum. ETH fell from over $4,000 in October to below $2,800 in November. At the time of writing, Ether was trading at $2,744.50, reflecting a 10% increase in the past 24 hours.

Tom Lee Says Market Makers Behind Ongoing Crypto Weakness

Tom Lee, chairman of Ether treasury company BitMine, says crypto markets are under pressure. He told CNBC that the October 10 crash, which wiped out $20 billion, hurt some market makers badly. This left them with serious money problems. With less money to use and lower earnings from traders, market makers are struggling. Many are reducing their balance sheets to save cash and stay active in the market.

He said:

“And if they’ve got a hole in their balance sheet that they need to raise capital, they need to reflexively reduce their balance sheet, reduce trading. And if prices fall, they’ve got to then do more selling. So I think that this drip that’s been taking place for the last few weeks in crypto reflects this market maker crippling.”

Lee, also co-founder of Fundstrat, compared crypto market makers to “central banks” because they provide liquidity. He warned that the market may face more struggles until these money issues are fixed. He added that the stock market today is similar to the October 10 crash, which hit market makers very hard. Their role is important because they keep the crypto market running smoothly.

Bitcoin was over $121,000 before the October 10 crash but has fallen to about $84,000. Most of the crypto market followed the same downward trend. Tom Lee said the market may take a few more weeks to recover as market makers continue adjusting their positions. He compared it to 2022, when it took eight weeks for the market to stabilize after a similar event. Lee added that crypto, especially Bitcoin and Ethereum, can act as an early signal for the stock market because of this slow recovery and reduced liquidity.

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