BitMine Immersion (BMI), one of the world’s largest institutional holders and miners of Ethereum (ETH), is grappling with an estimated $6 billion in unrealized ‘paper losses’ as the cryptocurrency market continues its steep descent. The immense loss stems from the significant depreciation of BMI’s proprietary treasury, which holds millions of ETH mined over the past several years, now valued far below its peak market capitalization earlier this cycle.
The calculation of the $6 billion figure is based on the difference between Ether’s all-time high valuation (near $4,800) and its current depressed trading range, which has seen the asset plummet by over 70%. As a paper loss, it does not represent immediate cash outflow but places enormous pressure on the company’s balance sheet and future financial flexibility.
The deepening Ether sell-off is being fueled by a confluence of factors, including aggressive interest rate hikes globally, liquidity crises within the decentralized finance (DeFi) sector, and increasing uncertainty surrounding the timeline and mechanics of Ethereum’s upcoming transition to Proof-of-Stake (The Merge), which will render current mining operations obsolete.
While BMI management has publicly maintained that they possess sufficient non-ETH liquid assets to cover operational expenses and service debt obligations, continuous price erosion raises the specter of margin calls. A significant portion of BMI’s treasury holdings are reportedly collateralized for corporate loans. If the ETH price breaches critical liquidation thresholds, BMI could be forced to liquidate large quantities of Ether into the open market, potentially cascading the crypto market further downward.
Source: BitMine Immersion faces $6B paper loss as Ether sell-off deepens
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