A recent report highlights that Digital Asset Treasury (DAT) firms such as BitMine and Strategy are holding billions in unrealized profits as Ethereum (ETH) and Bitcoin (BTC) drop below key support levels.
On Thursday, crypto analytics firm 10x Research noted that BitMine Immersion Technologies, the largest Ethereum Treasury company, is facing multi-billion-dollar paper losses due to the ongoing market downturn, which has pushed ETH to its lowest levels in months. The report stated, “Bitmine is now down more than $1,000 per ETH, implying about $3.7 billion in unrealized losses, not even accounting for the substantial net asset value (NAV) premium paid by public-market investors.”
10x Research suggests that treasury companies will find it difficult to attract new retail investors in the current climate, where existing shareholders are already dealing with massive losses. When NAV increases, long-term shareholders gain, but when it falls, losses multiply—a risk DAT investors often overlook. As the premium dwindles to zero, investors can become stuck in a “Hotel California” situation, unable to exit without significant losses.
The report also pointed out that, unlike Exchange-Traded Funds (ETFs), Digital Asset Treasuries often include complex and opaque fee structures, similar to hedge funds, which can quietly reduce returns. Many investors are unaware that these embedded costs are much higher than the management fees charged by firms like BlackRock for their Bitcoin and Ethereum ETFs.
Additionally, 10x Research argued that if BlackRock introduces a staked Ethereum ETF, DATs could face growing scrutiny as retail investors shift toward lower-cost yield options.
Despite these challenges and ETH’s price decline, BitMine remains optimistic about Ethereum. According to Lookonchain data, a wallet believed to be linked to the company purchased 21,054 ETH, worth approximately $66.57 million, on Tuesday night.
In a November message, Chairman Thomas ‘Tom’ Lee noted that crypto markets haven’t fully recovered from the October 10 liquidation event, and the ongoing weakness suggests one or more market makers are struggling with damaged balance sheets. He added that BitMine does not believe crypto prices have peaked this cycle, estimating a potential top is still 12 to 36 months away.
In contrast, Lee told CNBC on Monday that the market is “pretty close” to hitting a bottom this week. He explained that while crypto was affected by the October 10 event, the underlying fundamentals remain strong, and the volatility reflects future expectations, making it an attractive investment at current levels.
Notably, ETH has fallen below $3,000 for the first time since July, testing the $2,800 range on Thursday morning. Lee maintains that Ethereum is undervalued because its narrative is strengthening relative to Bitcoin, and the assets locked on its blockchain provide an intrinsic floor.
As of now, Ethereum is trading at $2,840, down 29% over the past month.
Frequently Asked Questions
Of course Here is a list of FAQs about BitMines reported 37 billion in unrealized losses designed to be clear and accessible for all levels of understanding
Beginner Definition Questions
1 What is BitMine
BitMine is a fictional name used in this example to represent a large cryptocurrency mining company In real life this could refer to companies like Marathon Digital or Riot Platforms
2 What are unrealized losses
An unrealized loss is a paper loss It means an asset you own has decreased in value below what you paid for it but you havent sold it yet The loss only becomes realized when you sell
3 Why does a mining company have such huge losses
Mining companies often hold large amounts of the cryptocurrency they mine as a longterm investment When the market price of that crypto falls significantly the value of their holdings drops creating these paper losses
4 What does Ethereums price being under 3000 have to do with it
This is the trigger BitMine likely acquired a massive amount of Ethereum when the price was higher Now that the price is stuck below 3000 the total value of their Ethereum stash is much lower creating the 37 billion gap between their purchase cost and its current market value
Intermediate Impact Questions
5 Is BitMine going bankrupt because of this
Not necessarily Unrealized losses are not immediate cash losses The companys survival depends on its cash flow from ongoing mining operations and its reserves If they are forced to sell their Ethereum at a low price to cover expenses then the losses would become real and could threaten their stability
6 How does this affect the average Ethereum investor
It can create negative sentiment and selling pressure News of a major holder facing massive losses can scare other investors potentially driving the price down further It also highlights the risks of large concentrated holdings in a volatile market
7 What are mining rewards and how are they involved
Mining rewards are the new Ethereum that companies like BitMine earn for validating transactions on the network They often hold these rewards as assets on their balance sheet The declining price turns what should be valuable rewards into