BitMine to stop buying Ether at 5% of supply, Tom Lee says

BitMine Immersion Technologies will stop buying Ether (ETH) once it owns 5% of the token's supply, chairman Tom Lee said Wednesday. The company held 6,016,414 ETH on October 4, about 100,000 short of that cap and roughly six weeks of buying away.

Lee made the comment at the Token2049 conference in Singapore, as reported by CoinDesk and Decrypt. BitMine set out the holdings in a press release dated October 5. The firm now owns close to 4.9% of the 122.1 million Ether in circulation.

What Lee said at Token2049

He told the audience the company was almost finished. "Now we're going to stop," Lee said, according to CoinDesk. "We only need to get another 100,000 ETH to get to 5%." He called that level a hard cap, a limit set to protect shareholder value.

A hard cap, not a pause. Lee has signaled before that BitMine could sell some Ether to keep its share from rising above 5%, Decrypt reported, most likely rewards earned from staking. At last week's pace, the firm would reach the target in six to seven weeks. The timing matters.

How much Ether BitMine holds

The 6,016,414 ETH were worth about $15.5 billion at prices on Wednesday, CoinDesk said. BitMine put the value of its total crypto, cash and venture bets at $17.4 billion in the October 5 release. Cash and marketable securities came to $643 million, more than twice what the firm needs to finish the job at current prices.

Most of the coins are put to work. BitMine said 5,067,309 ETH, about 84% of the pile, was staked as of October 4, earning a yield it can later sell or reinvest. The staked coins were worth $13.8 billion at $2,726 each on that date, by the company's own figures. BitMine calls its push to own a twentieth of all Ether the "Alchemy of 5%," and by its own count it is 99% of the way there.

Why the market reacted

BitMine has been one of Ether's steadiest buyers all year. Take that bid away and traders lose a familiar source of demand. Ether fell about 5% in the 24 hours around Lee's remarks, trading near $2,580 on October 7, its weakest level since September 20, according to CoinDesk. It dropped nearly twice as much as bitcoin over the same stretch. The stock fell too. BitMine shares closed at $24.56, down 6.28%. Buyers took note.

Listed treasury companies like BitMine raise cash to buy crypto and hold it on the balance sheet. The model rests on confidence that the coins stay put. Peers such as Metaplanet have shown they can trade their holdings without denting the price, a point that matters more now that one large buyer is stepping back.

Timing has not been kind to the company. Most of its Ether was bought at higher prices, leaving a paper loss of about $4.5 billion, according to DropsTab data cited by CoinDesk and Decrypt. That is about seven times the firm's cash. The loss is real only if BitMine sells.

Not everyone reads this as bad news. A buyer that stops is not a seller. BitMine has not said it will offload its holdings, and Lee framed any future sales as small and tied to staking rewards. Whether the market treats a filled-up treasury as a steady holder or a seller in waiting is the open question.

What to watch

Two signals will tell the story from here. The next weekly disclosure will show whether BitMine has crossed 5%, and traders will read it closely. Watch for any shift in tone on selling, since Lee has left the door open to trimming staking rewards. Watch Ether itself into the final weeks of the year, as one of its most reliable buyers winds down. BitMine has not said what it plans to do with its cash once the purchases end.