Kerrisdale Capital has taken a short position in BitMine Immersion (BMNR), the ether-focused digital asset treasury firm led by Fundstrat’s Thomas Lee, calling its business model a relic of a bygone crypto era.
In a detailed report published Wednesday, the well-known short-seller said BitMine’s strategy mirrors that of Strategy (MSTR) — issuing shares at a premium to buy crypto and grow token-per-share metrics — but argued that market conditions no longer support that model.
“BMNR is chasing a model that is on its way to extinction,” Kerrisdale wrote. “Scarcity and meme-like enthusiasm once kept premiums high despite constant dilution, but those conditions have vanished.”
Kerrisdale months ago shorted Strategy against a long in bitcoin, noting that company’s premium to net asset value was not sustainable. The trade thus far has proven quite profitable.
Las Vegas-based Bitmine has undergone a dramatic pivot over the past year, transforming from a niche bitcoin miner into an ether-heavy corporate treasury. With Fundstrat co-founder Thomas Lee as executive chairman, BitMine has raised over $10 billion since July 2025, primarily through at-the-market (ATM) stock sales, and acquired more than 2.8 million ETH.
The stock — after rocketing from about $5 to more than $100 on the launch of its ether treasury strategy — has pulled back to around $58 in its latest trades.
Kerrisdale said the pace of that stock issuance, roughly $170 million per day, has “turned early enthusiasm into fatigue.” The report criticized BitMine’s latest $365 million equity raise, marketed as a premium deal, as a “discounted giveaway” once warrant terms are factored in.
The firm also took aim at Lee himself, saying his presence lacks the gravitational pull needed to maintain investor confidence. “Tom Lee brings name recognition as a strategist and television commentator, but he does not command the kind of cult-like following that turned Michael Saylor into a meme-stock icon,” the report said.
While Kerrisdale said it remains bullish on ether, it sees no justification for paying a premium through intermediaries like BitMine. “If you want ETH, just buy it directly,” the firm wrote.
Adding to the pressure is a flood of new competition. Over 150 U.S.-listed firms are reportedly planning $100 billion in crypto treasury offerings, and a coming wave of Ethereum ETFs is expected to offer lower-cost and more transparent exposure.
Kerrisdale said BitMine’s disclosures have grown increasingly opaque. ETH-per-share growth has slowed sharply in recent months, even as token holdings rose. “The reflexive loop that every DAT relies on had begun to stall,” the firm wrote, noting that BitMine’s market premium fell from 2.0x in August to around 1.2x in October.
“The strategy is generic, the competition is mushrooming, disclosures have grown opaque, ETH-per-share has slowed,” Kerrisdale concluded. “BMNR’s premium is destined to sink.”
A representative for Bitmine did not respond to a request for comment. Shares of the company are lower by 2% Wednesday.