Tom Lee defends BitMine strategy as Ethereum losses mount

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Tom Lee frames losses as part of cycle

Highlights

Tom Lee says BitMine’s more than $6 billion in unrealized losses reflect a long-term ether treasury strategy, not execution issues.
BitMine has continued accumulating ETH, holding about 4.28 million tokens or 3.55% of supply, despite a sharp price decline.
Institutional data from Goldman Sachs show rising Ethereum network activity even as prices remain under pressure.

In posts on X, Lee said BitMine is designed to track ether and outperform it over time, likening the company to an index-style vehicle rather than a short-term trading operation. With crypto prices sliding, he insisted red ink is a predictable outcome of the approach. “Crypto is in a downturn, so naturally ETH is down,” Lee wrote, adding that paper losses are “not a bug — it’s a feature,” and questioning whether index funds face the same scrutiny during market declines.

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BitMine adds ETH as Lee calls the pullback attractive

BitMine’s scale has amplified attention. Recent reporting cited more than $6 billion in unrealized losses after ether’s decline reduced the value of roughly 4.24 million ETH to about $9.6 billion from nearly $14 billion in October. The firm also added more than 40,000 ETH shortly before another leg lower, increasing focus on balance-sheet exposure.

Lee has framed BitMine as a treasury company centered on long-term accumulation and staking yield, not price timing. The firm has previously estimated annual staking revenue of about $164 million, but that income offers limited cushion during sharp declines. Still, Lee argues the current selloff is driven more by positioning than deteriorating fundamentals. “Thus, non-fundamental factors are arguably more the factors explaining the weakness in ETH prices.” He has pointed to leverage remaining subdued since an Oct. 10 market shock and said precious metals have “acted as a ‘vortex’ sucking away risk appetite from crypto,” as capital rotated into gold and silver.

BitMine bought another 41,788 ETH over the past week, lifting holdings to about 4.28 million ETH, or 3.55% of supply, with roughly 2.87 million staked. “BitMine has been steadily buying Ethereum, as we view this pullback as attractive, given the strengthening fundamentals,” he said.

Institutions flag strong onchain signals despite weak prices

Goldman Sachs has echoed Lee’s emphasis on network activity, saying fundamentals on Ethereum remain robust despite weak market performance. The bank cited a 27.5% monthly increase in daily active addresses, a 26.8% rise in new addresses, and a 36.0% jump in transactions. It reported January averaged about 427,000 new Ethereum addresses per day, well above the roughly 162,000 seen during the 2020 “Summer of DeFi,” while daily active addresses reached about 1.2 million on a 7-day average.

Goldman also noted Ethereum’s market cap has fallen below realized market cap, implying many holders are underwater. Timothy Misir of BRN highlighted a key support factor: “The steady flow of ETF inflows into cryptocurrencies is a key indicator. Without this support, it will be difficult for the uptrend to be sustainable.”

Why this matters

Tom Lee’s messaging shows a deliberate bet on long-horizon treasury exposure even under stress, not a shift toward tactical trading. Ethereum’s onchain growth and rising address activity suggest utility is holding up despite falling prices. If deleveraging persists into early 2026, as Lee warns, the durability of treasury-style strategies may hinge on liquidity conditions and sustained institutional inflows.

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