BitMine Faces ‘Hotel California’ Crisis as Ethereum Bet Backfires

BitMine Immersion Technologies, the world’s largest corporate Ethereum (ETH) holder, is now facing over $4 billion in unrealized losses on its ETH holdings.

The firm’s drawdown reflects wider turmoil for digital asset treasury (DAT) companies, prompting new questions about the sustainability of this business model.

BitMine’s Mounting Losses Create ‘Hotel California’ Scenario

In a recent disclosure released earlier this week, BitMine revealed that it held nearly 3.6 million ETH, equivalent to approximately 2.97% of Ethereum’s supply. The company is steadily approaching its long-stated goal of accumulating 5% of all ETH.

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However, its treasury is increasingly feeling the strain from the asset’s sharp price decline. Ethereum has dropped 27.4% over the past month, now trading below $3,000. Concurrently, BitMine’s balance sheet has reflected that drop.

The latest figures show that the firm’s ETH stack is now worth just under $10 billion, placing BitMine’s unrealized losses at around $4.18 billion.

According to BitmineTracker data, the company’s basic market-to-net-asset-value (mNAV) ratio stands at 0.73, while its diluted mNAV is 0.88. Research firm 10x Research highlighted the implications in a recent post on X (formerly Twitter).

The post emphasized that shifts in NAV tend to reward long-term shareholders when the metric rises, but can amplify losses when it declines — a pattern that many investors in digital-asset vehicles still overlook.

“Treasury companies will face a hard reality: attracting new retail investors becomes nearly impossible when existing shareholders are sitting on billions in losses. When the premium inevitably shrinks to zero, as it is doing now, investors find themselves trapped in the structure, unable to get out without significant damage, a true Hotel California scenario,” 10x Research wrote.

The strain is equally visible in the company’s stock performance. Google Finance data shows that BMNR’s monthly dip is nearly twice that of ETH, with the share price dropping 49.8% over the same period.

This divergence is not unique to BMNR. Several Bitcoin-oriented treasuries have displayed the same pattern, registering declines that exceed BTC’s own downturn.

Meanwhile, BitMine is not alone in these challenges. Sharplink Gaming, the second-largest corporate holder of ETH, faces over half a billion dollars in unrealized losses. It owns 859,853 ETH valued at $2.4 billion at current market prices. The firm’s stock, SBET, is down 35.15% over the past month.

Despite this, on-chain data reveals BitMine is still actively buying ETH. Earlier this month, the firm bought 110,288 ETH. OnchainLens also reported a recent purchase of 17,242 ETH, valued at $49.07 million, from FalconX and BitGo.