A recent report discussed how Digital Asset Treasury (DAT) companies like BitMine and Strategy are sitting on billions of dollars of unrealized profits as Ethereum (ETH) and Bitcoin (BTC) lose crucial support levels.<\/p>\n
On Thursday, crypto insights company 10x Research reported<\/a> that the largest Ethereum Treasury company, BitMine Immersion Technologies, has a multi-billion-dollar paper loss after the ongoing market correction, which has sent ETH to multi-month lows.<\/p>\n \u201cBitmine is now down more than $1,000 per ETH, implying about $3.7 billion in unrealized losses before even accounting for the hefty NAV [net asset value] premium public-market investors paid on top,\u201d the report highlighted.<\/p>\n 10x Research believes that treasury companies will struggle<\/a> to attract new retail investors amid the current market environment, where existing shareholders are sitting on billions of dollars in losses.<\/p>\n When NAV rises, \u201cold\u201d shareholders benefit; when it falls, the damage compounds, a dynamic DAT investors often underestimate. 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.<\/p>\n Unlike Exchange-Traded Funds (ETFs), Digital Asset Treasuries \u201clayer on complex, opaque, and often hedge-fund-like fee structures that can quietly erode returns,\u201d the report added, noting that many investors are unaware that DATs embedded costs \u201cfar exceed\u201d the management fee charged by asset managers like BlackRock on its Bitcoin (BTC) and ETH ETFs.<\/p>\n Moreover, 10x Research argued that with the potential introduction of a staked Ethereum ETF by BlackRock, \u201cthe economics of DATs are likely to face increasing scrutiny\u201d as retail investors reallocate to a low-cost source of yield.<\/p>\n Despite DAT challenges and ETH\u2019s price action, BitMine has continued to bet on the King of Altcoins. According to Lookonchain data<\/a>, a new wallet suspected to be linked to the Ethereum-focused treasury company purchased 21,054 ETH, worth around $66.57 million at the time, on Tuesday night.<\/p>\n In its November Chairman\u2019s Message, Thomas \u2018Tom\u2019 Lee, noted that the crypto market prices have not recovered from the October 10 liquidation event, and \u201cthe lingering weakness has the hallmarks of a market maker (or two) suffering from a crippled balance sheet.\u201d<\/p>\n BitMine does not believe\u00a0crypto\u00a0prices have peaked for this cycle, he added, suggesting that \u201ca\u00a0crypto\u00a0cycle top is likely 12-36 months away.\u201d On the contrary, Lee told<\/a> CNBC News on Monday that the market is \u201cpretty close\u201d to bottoming this week.<\/p>\n Crypto suffered from that liquidation event on October 10th, but because the fundamental story is intact and crypto discounts the future, that\u2019s why it\u2019s volatile, but it still looks pretty attractive here.<\/p>\nBitMine Remains Confident On Ethereum<\/h2>\n