Immersion Technologies, a prominent firm managing Ethereum treasury assets under the BitMine brand, reported a staggering quarterly loss exceeding $3.8 billion for the period ending February 28. This figure was disclosed in a newly filed 10-Q with the SEC on Tuesday.
Nearly 99% of the company’s losses were attributed to unrealized declines from its substantial Ethereum holdings, pushing total losses beyond $9 billion over six months concluding in February.
“Our business model is now centered around our ETH treasury strategy and capital-light ecosystem services,” stated the firm. It emphasized that “ETH market conditions, impacting both the value of our holdings and the financial dynamics of any staking operations or related activities,” are pivotal to its performance outcomes.
Additionally, BitMine recorded an unrealized loss of approximately $21 million on its investment in Eightco (ORBS), a Worldcoin treasury enterprise offering exposure to OpenAI, known for developing ChatGPT. Notably, Tom Lee, Chairman of BitMine and an investor in Dastan, Decrypt’s parent company, is associated with this.
Compared to the previous year, where losses amounted to $1.15 million during the same period, the current figures represent a significant downturn.
Ethereum, serving as BitMine’s primary treasury asset and ranking second among cryptocurrencies, witnessed nearly a 53% decline from its peak of $4,946 in August, trading at $2,346 recently. By February 28, ETH was valued around $1,965, down from about $2,800 in December.
Despite a recent $157 million purchase adding to their holdings, BitMine now possesses 4,874,858 ETH worth over $11.3 billion. However, the acquisition cost far exceeds current market value, with initial purchases of 4.47 million ETH costing nearly $17 billion as per its SEC filings.
This means that 92% of BitMine’s total Ethereum holdings were acquired at an average price of approximately $3,794 each, around 63% higher than the present trading rate. Although losses have slightly diminished with a 4% rise in Ethereum prices over the past week, the company’s shares (BMNR) are up by about 1%, trading recently at $21.69 following their recent move to the NYSE from the NYSE American exchange.
The stock has dropped nearly 60% over the last six months and is down 20% since the start of the year.