Bitmine Immersion (BMNR), the largest Ethereum-focused digital asset treasury (DAT) led by Wall Street veteran Thomas Lee, is facing huge unrealized losses on its big bet on Ethereum. Ethereum$2,749.31.
The company on Friday announced net income of $328 million for the fiscal year ended Aug. 31, or fully diluted earnings per share of $13.39. It also declared a nominal dividend of $0.01 per share and announced plans to launch its staking infrastructure product, MAVAN (Made-in America Validator Network), in early 2026.
Markus Thielen, founder of 10x Research, warned that despite strong headline profits, the company and other DATs face serious structural problems.
The company is currently estimated to have over $4 billion in unrealized losses on its holdings following the 45% drop in ETH prices since its peak in August. BMNR stock has fallen 84% from its July high, and Thielen noted that the drawdown has erased the net asset value (NAV) premium that once fueled investor enthusiasm.
Thielen argued that many digital asset treasury (DAT) firms rely on complex, multi-layered organizations such as asset managers, strategic advisors and promotional billboards who earn high fees while embedding fees that “quietly erode their bottom line.”
He noted that BitMine’s management compensation and external advisors could draw in $157 million annually over 10 years through compensation and advisory agreements.
Thielen pointed out that Ether’s staking yield, which is a key source of income for holding cryptocurrencies, is not very attractive to investors. According to CESR’s Comprehensive Ether Staking Rate, the staking yield on Ether is currently around 2.9%, far below the yield on US dollar money market funds, which are considered risk-free. After accounting for operating costs and intermediaries, the effective return for shareholders is much lower, Thielen said.
Thielen said that yield “will not be accepted by serious institutional investors,” especially when ETH’s “underlying collateral is constantly at risk due to price fluctuations.”
Thielen warned that DAT could trap shareholders, especially as NAV premiums collapse. “Investors find themselves trapped in a structure and unable to get out without significant damage. It’s a Hotel California scenario,” he said.
