Last week, Tom Lee’s Bitmine purchased an additional 52,203 Ethereum [ETH] for $92 million as the market struggled to pick up pace. With this, Bitmine now has 5,672,956 ETH, valued at $10 billion.
For context, Ethereum’s price was in the bear market, trading at $1,689.19 at press time following a 2.51% decline over the previous day. The spot ETH ETF, meanwhile, has been experiencing a run of outflows, with $66.1 million recorded on the 22nd of June.
In addition to amassing ETH, Bitmine also has 4,718,677 ETH staked in total, valued at $8.2 billion at an average price of $1,733 per ETH. This raises the question of why Bitmine is adding ETH despite weak market momentum.
What is Bitmine’s strategy?
Lee emphasized the company’s intention to keep building up at a steady pace through 2026. He believes the market is currently in the early stages of a fresh bullish cycle, which he called the “crypto spring.”
The best years for crypto remain ahead, in our view. Tokenization and the rapid progress in AI are expected to drive exponential demand growth for blockchain and decentralized crypto.
Additionally, he mentioned the company’s objective to achieve the “alchemy of 5%” by 2026. Even recent concerns that the Ethereum Foundation might not be able to finance future network upgrades were dismissed by him, as he said,
In my opinion, zero chance of this ‘crisis’ happening for $ETH. Zero. Funding secured.
These could be the cause of Bitmine’s increased Ethereum additions despite ETH’s weak market dynamics. In addition, bullish traders are also holding onto their positions even though Ethereum has dropped about 65% from its peak, suggesting that long sentiment is still strong.
Large liquidity clusters around the $1,900 and $1,600 levels are visible in the liquidity data, indicating that if ETH moves in either direction, a sizable number of leveraged positions may have to close.
What are on-chain metrics hinting at?
Furthermore, CoinGlass data indicates that traders were still primarily on the long side, with the recent data on Ethereum’s OI-Weighted Funding Rate remaining largely positive as of writing.
Meanwhile, Ethereum’s Exchange Flows were inconsistent during the month of June, with both inflows and outflows occurring during periods when the price of ETH steadily dropped.
But given the recent rise in exchange deposits, some holders may have been transferring ETH to exchanges anticipating a sale or an increase in trading activity given the recent volatility of the market.
Final Summary
- Tom Lee’s Bitmine continues to buy ETH despite outflows from ETFs and bearish price momentum.
- The on-chain metrics give a mixed opinion about Ethereum’s upcoming trajectory.