Tom Lee warns of liquidity crunch for market makers, Bitcoin buys another $49 million in ETH

Bitmine continues to buy up Ethereum, but Chairman Tom Lee warns that the crypto market is still suffering from weak market maker liquidity.

According to data shared by analytics firm OnChainlens on November 21st, Bitcoin purchased an additional 17,242 ETH, worth about $49 million.

The company currently holds approximately 3.5 million Ethereum (ETH) worth over $10 billion. The company’s steady purchases continue even as the crypto market is under significant pressure.

Bitmine continues to actively accumulate ETH

Bitmine was originally a mining company, but has transitioned into a digital asset treasury business. The plan is to build a long-term Ethereum reserve and eventually hold around 5% of the asset’s circulating supply.

The company will fund these acquisitions through equity raising, cash reserves and staking rewards. Most purchases are made through large in-store desks such as FalconX and BitGo.

The company views the recent price drop as a buying opportunity. ETH plummeted from a high of over $4,000 in early October to below $3,000 in mid-November. Despite this downturn, Bitmine has continued to accumulate large amounts of money and is now second only to Strategy in terms of total crypto assets held.

Tom Lee says market makers are still repairing their balance sheets

Tom Lee, chairman of Bitmine and co-founder of Fundstrat, pointed out in an interview with CNBC on November 20 that the recent downturn in cryptocurrencies overall is related to a liquidity squeeze among major market makers. He said businesses were hit hard by the Oct. 10 crash, which wiped out about $20 billion in forced liquidations.

Lee said market makers are cutting back on activity because they have “a hole in their balance sheets” and need to free up capital. He added that some companies are “further shrinking their balance sheets” to recover from last month’s sharp decline.

Lee said this is slowly and steadily pushing prices down as these companies de-risk. He said the current period mirrors a similar event in 2022, which took about eight weeks to stabilize.

The market is now six weeks into the process, and Lee believes it “may take a few more weeks” before the pressure starts to fade. He notes that Bitcoin and Ethereum are serving as early indicators of this liquidity squeeze, and expects the situation to improve once market makers resume normal operations.

Bitmine remains committed to its long-term Ethereum strategy. The company sees this asset as a core part of decentralized finance, smart contracts, and tokenization. The company’s steady purchases suggest strong confidence even as the market waits for liquidity to normalize.