Bitmine is preparing to raise $300 million to buy more Ethereum despite a $9.2 billion loss.

Bitmine Immersion Technologies has filed with the U.S. Securities and Exchange Commission (SEC) to prepare for a preferred stock offering to raise an additional $300 million.

6/5/20263 min read

Capital raising plan and preferred stock financing structure

Bitmine plans to issue 3,000,000 perpetual Class A preferred shares with a face value of one hundred dollars each, totaling three hundred million dollars, to raise capital. This preferred stock financing structure provides a fixed annual dividend of 9.5%, giving preferred stock investors a fixed return regardless of fluctuations in Bitmine's common stock price. This preferred stock structure reflects Bitmine's need to pay a higher cost of capital to raise additional funds as the company's common stock is under pressure from Ethereum's unrealized losses.

Bitmine's filings with the SEC indicate that all or part of the proceeds from the preferred stock offering will be used to purchase more Ethereum or for general company purposes. The discrepancy between raising capital at a high cost (9.5% dividend) and the intended use of that capital (purchasing Ethereum at a lower expected return) reflects management's belief that the returns from the increase in Ethereum's price will outweigh the financial costs incurred.

The position and size of Ethereum holdings in the treasury.

Currently, Bitmine holds 5,416,000 Ethereum tokens, equivalent to approximately 4.5% of the total circulating Ethereum supply. This holding size makes Bitmine the world's largest holder of digital assets, second only to Strategy (a lending company with a large Bitcoin treasury) in the global digital asset holding rankings.

Bitmine's average purchase price for its Ethereum portfolio was 2,260 ETH/USD, implying that with Ethereum currently priced at $1,800, the company's financial position reflects an unrealized loss of approximately $2 billion. However, recent estimates suggest the total unrealized loss could reach $9 billion considering the company's net worth and other investments.

Bitmine has undergone a near-complete transition from a traditional cryptocurrency mining model to a "leveraged Ethereum treasury" model since 2025. Over the past six months, the company has doubled its outstanding shares (equivalent to operating shares), raising over 5,000 shareholders to purchase accumulated Ethereum.

This fund management model helped Bitmine amplify paper profits during bull market cycles; however, when the cycle reversed, it quickly became a huge burden. The current situation clearly demonstrates this: as Ethereum's price plummeted from its August peak of nearly $4,900 to below $1,800, the ETH fund's unrealized losses rapidly increased, putting pressure on Bitmine's share valuation.

The discrepancy between operating costs and revenue.

Bitmine's Q1 2026 financial report clearly shows an inconsistency between high operating expenses and actual revenue. The company reported a net loss of $3.8 billion in Q1, while total revenue reached only $11 million (primarily from Ethereum staking). General and administrative (G&A) expenses in Q1 amounted to $7 million.

This apparent contradiction may be inherent in the digital treasury model: the company incurs limited operating expenses (employee salaries, administrative costs) but its revenue is almost entirely dependent on price fluctuations of the assets it holds. When the market declines, accounting profits can quickly outweigh losses.

Bitmine reports revenue from Ethereum staking of approximately $400 million annually, or $10 million per quarter. However, with operating expenses of $70 million per quarter, staking revenue only covers a small fraction of the company's basic costs.

Risks from a sell-off

A worrying risk is that if the price of Ethereum continues to weaken, Bitmine may be forced to sell a portion of its Ethereum holdings to increase liquidity or adjust its derivative positions. Any such sell-off risks becoming one of the largest in Ethereum history, with significant ripple effects across the market.

This liquidity risk is further exacerbated by the fact that Bitmine's stock has fallen by approximately 28% since the beginning of May, making it more difficult to raise new capital. If the stock continues to fall, the cost of further fundraising will increase, creating a dangerous downward spiral.

Assessment and Conclusion

Bitmine's decision to lock in $300 million to buy more Ethereum, despite a $9 billion loss, may demonstrate the organization's strong commitment to Ethereum's long-term prospects. However, it also reflects the enormous profit potential of the digital treasury model, where the success or failure of a large-scale monetization scheme depends on asset price volatility.

If Bitmine succeeds with this strategy and Ethereum recovers significantly, the company could become profitable, making the leveraged ETH treasury model an extremely effective fundraising method. However, if Ethereum continues to weaken, Bitmine will face significantly increased financial pressure.

Disclaimer: The information presented in this article is the author's personal opinion in the field of cryptocurrencies. This is not financial or investment advice at all. Every investment decision should be based on careful consideration of your personal portfolio and risk tolerance. The opinion in the article does not represent the official position of the platform. We recommend that readers do their own research and consult experts before making any investment decisions.

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