BitMine approved for share expansion! Tom Lee plans stock issuance and ETH reserve increase

Bitmine receives 81% shareholder approval to expand authorized shares, holding 4.203 million ETH (3.5% of circulating supply), 193 BTC, and nearly $1 billion in cash. Has pledged 1.83 million ETH, with a pledge rate of 2.83%, and recently invested $200 million in Beast Industries.

BitMine Secures 81% Shareholder Support to Expand Authorized Shares

Bitmine Immersion Technologies (BMNR) is the largest Ethereum holding company, gaining investor approval to increase the number of authorized shares, providing greater flexibility in fundraising. In a press release issued Tuesday, Bitmine stated that at the annual shareholder meeting held on January 15, Proposal 2 was approved with 81% of the votes.

This proposal does not mean issuing new shares immediately but raises the cap on the number of shares the company can issue in the future. The statutory share limit defines the maximum number of shares the company can sell. Raising this cap will enable Bitmine to issue new shares for financing growth, paying acquisition costs, or supporting its ongoing accumulation of Ethereum. On Tuesday, BMNR fell 8%, while ETH prices also dropped sharply to just above $3,000.

Although issuing additional shares may ultimately dilute existing shareholders’ equity, Bitmine executives have tried to assure shareholders that they will not sell shares below the company’s net asset value (mNAV). The net asset value reflects the substantial Ethereum (ETH) holdings, which increased by 35,268 ETH last week. As of press time, the company’s stock price was trading at 0.86 times the net asset value, indicating the market is valuing the company’s assets at a discount.

This high shareholder approval rate (81%) demonstrates strong investor confidence in Bitmine’s long-term strategy. In the context of volatile crypto markets, such a high level of support is uncommon and reflects shareholders’ recognition of management’s ETH accumulation strategy and the company’s future development direction.

Holding 4 Million ETH, Circulating 3.5%, Becomes a Whale

The company added that these holdings currently include 4.203 million tokens, about 3.5% of Ethereum’s circulating supply, along with 193 BTC and shares worth $22 million in Eightco Holdings (ORBS). This makes Bitmine the world’s largest Ethereum corporate holder, with a significant influence on the Ethereum market.

The 4.203 million ETH holdings are extremely rare among crypto companies. In comparison, even aggressive Bitcoin accumulators like MicroStrategy hold only about 2% of Bitcoin’s circulating supply. Control of 3.5% of Ethereum’s circulating supply positions Bitmine as a key participant in the Ethereum ecosystem, with buying and selling decisions potentially impacting market prices.

Additionally, the nearly $1 billion in cash provides strong financial flexibility. This cash reserve can be used to continue purchasing ETH, support strategic acquisitions, or investments. The recent $200 million investment in Beast Industries exemplifies this diversification strategy, showing that Bitmine is not only focused on ETH accumulation but also seeking investment opportunities in related industries.

While the 193 BTC holdings are relatively small, they show that Bitmine is not putting all eggs in one basket. The $22 million worth of Eightco Holdings shares further diversify the company’s asset allocation, reducing risks associated with single-asset volatility.

Staking 1.83 Million ETH with Attractive Annual Yield

Bitmine has staked approximately 1.83 million ETH, with an overall Ethereum staking rate of 2.83%. This staking strategy provides the company with a stable passive income stream and supports the security of the Ethereum network. Based on the current staking rate, 1.83 million ETH can generate about 51,789 ETH annually (1.83 million × 2.83%).

At the current ETH price of around $3,000, this amounts to approximately $155 million in annual staking income. This passive income flow offers additional cash flow for Bitmine, which can be used to cover operational costs or continue purchasing more ETH. More importantly, the staked ETH remains an asset of the company and can be unstaked and sold or used for other purposes when needed.

The staking rate of 2.83% may seem modest but is reasonable in the current Ethereum environment. As Ethereum develops and staking participation changes, this yield may fluctuate. Bitmine’s decision to stake a large portion of its holdings (1.83 million / 4.203 million = 43.5%) reflects confidence in long-term ETH holdings, as staking typically requires locking assets for a period.

This staking strategy also indicates Bitmine’s deep involvement in the Ethereum ecosystem. As a major validator, Bitmine has a say in Ethereum network governance and can participate in network decision-making through validator nodes.

Tom Lee’s Diversified Strategy for BitMine

Tom Lee, Fundstrat Research Director and Chairman of Bitmine, brings extensive market insight and strategic vision to the company. Lee is known for his bullish stance on the crypto market and holds an optimistic outlook on Bitcoin and Ethereum’s long-term prospects. Under his leadership, Bitmine is not only focused on ETH accumulation but also seeks broader blockchain industry investment opportunities.

The recent $200 million investment in Beast Industries demonstrates that Bitmine’s strategy extends beyond holding crypto assets to investing in blockchain infrastructure and applications. This diversification reduces risks associated with single-asset price volatility and allows participation in the growth of the entire blockchain ecosystem.

The expansion of authorized shares provides greater flexibility for Bitmine’s diversification strategy. The company can raise funds through issuing new shares for more strategic acquisitions or investments. This flexibility is especially important in the fast-changing crypto market, where opportunities can be fleeting.

However, investors should also be aware of potential dilution risks. While management has promised not to issue new shares below mNAV, any issuance will dilute existing shareholders’ interests to some extent. Currently, the stock trades at 0.86 times mNAV, indicating the market values Bitmine below its net assets, which could present an attractive entry point for new investors.