Tom Lee's Bitmine favors share buybacks to ether purchases as crypto declines
The Ethereum treasury firm spent $46 million buying back shares as Chairman Tom Lee said crypto has held up better than AI stocks during the recent market pullback.
Bitmine Immersion Technologies BMNR resumed share repurchases last week after a 10-week hiatus, as Chairman Tom Lee expressed optimism about the recent crypto selloff. The Ethereum treasury firm made 2.04 million share purchases at an average price of $22.48, spending approximately $45.9 million. This marked Bitmine's first buyback since Aug.
17 when it concluded a five-week repurchase period totaling 21 million shares for $350 million. The latest acquisitions have brought Bitmine's total share buybacks this year to 22.9 million shares, valued at nearly $400 million. The company plans to continue buying back stock when management deems its shares undervalued. Chairman Tom Lee argued that crypto has performed better than AI-related stocks during the market downturn, attributing it to investors pulling back from riskier assets.
He noted that Ethereum (ETH) has fallen 13% from its recent peak, while US semiconductor stocks (SOXX) declined 20% in the same period. Lee believes this indicates a crypto bull market is underway. Alongside the share buybacks, Bitmine acquired 10,452 ETH, worth about $24.5 million, slowing from 12,535 ETH the previous week. This brought its holdings to 6,051,933 ETH, or around 4.95% of Ethereum's 122.2 million token supply.
The company is nearly 58,000 ETH short of its goal of owning 5% of all Ether. The two transactions demonstrate Bitmine's strategy of allocating capital between increasing ETH holdings and buying back its own shares, favoring the latter as the company approaches its accumulation target. Bitmine has also staked approximately 5.23 million ETH, representing 86% of its holdings, projecting roughly $318 million in annualized staking revenue at current yields.
Diversified Real World Asset (RWA) stablecoins generate yields of 5-7% from real credit as crypto funding diminishes to around 4%. GENIUS is expected to push yields off-chain and grow its total addressable market (TAM) to $4 billion in three years.
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