Both suffer massive unrealized losses exceeding $90 billion. Which is more dangerous: Strategy or Bitmine?
- Core Thesis: Amid the ongoing downturn in the cryptocurrency market, the corporate giants Strategy and Bitmine are both facing massive unrealized losses, but their financial strategies differ significantly: Bitmine maintains flexibility through equity financing and staking yields, whereas Strategy faces greater liquidity risk due to high-leverage debt and dividend payment pressure.
- Key Factors:
- As of now, with BTC at approximately $63,800 and ETH around $1,780, Strategy has an unrealized loss of about $10 billion, while Bitmine's unrealized loss stands at approximately $9 billion.
- Bitmine holds approximately 5.44 million ETH (representing 4.49% of the total supply), supporting its accumulation through equity financing (with an ATM program totaling $24.5 billion) and staking yields (earning $1 million daily), resulting in less financial strain.
- Strategy holds approximately $6.7 billion in convertible bonds and $9.9 billion in preferred stock, with an annual dividend obligation of about $1.7 billion, yet its cash reserves are only $871 million, covering just six months.
- Strategy's STRC preferred stock has fallen below $95 (de-pegging over 5%), and the company recently sold 32 BTC, shaking market confidence in its "buy and hold forever" mantra.
- Bitmine plans to issue preferred stock with an annual dividend yield of 9.5% to raise $300 million, further alleviating financial pressure; its primary risks are equity dilution and falling share prices.
Original｜Odaily（@OdailyChina）
Author｜Wenser（@wenser 2010 ）
As the market continues to decline, Strategy and Bitmine, the "DAT Treasury Titans," are both facing massive unrealized losses.
This morning, BTC briefly fell below $62,000 and is currently trading around $63,800; ETH dropped below $1,800 and is currently trading around $1,780. At current prices, Strategy's unrealized losses have reached a staggering ~$10 billion, while Bitmine's unrealized losses have also hit ~$9 billion. For a moment, Michael Saylor and Tom Lee find themselves "in the same boat," with Strategy and Bitmine ranking first and second as "the biggest loss-makers among DAT companies."
However, compared to Strategy, which needs to continuously pay dividends, Bitmine faces less financial pressure and retains flexibility, such as raising capital through STRC preferred shares. According to reports, Bitmine plans to raise $300 million through perpetual preferred shares with an annual dividend of 9.5%. Thus, Bitmine's pace of accumulating ETH seems set to continue, while the Sword of Damocles hanging over Strategy remains: where will the funds for future STRC dividend payments come from? Between the two, who faces greater financial pressure? Odaily will provide readers with an analysis.
Bitmine VS Strategy: Divergent Paths to DAT Holdings
Following today's BTC crash, community members used AI to create a parody of Saylor "promoting" BTC: "The sixty-something veteran is personally promoting, selling family-heirloom BTC at a low price of $62,000 each."
Returning to Bitmine and Strategy, currently, Bitmine's financial structure appears safer, while Strategy faces greater leverage pressure.
Bitmine's Equity Issuance Strategy: A Debt-Free DAT Play
As of June 1st, Bitmine holds 5,416,901 ETH; this represents approximately 4.49% of ETH's total supply, close to the "5% upper limit" Chairman Tom Lee has repeatedly emphasized. Yesterday, Bitmine added another 25,000 ETH via BitGo, valued at $48 million at the time, bringing its total holdings to 5,441,901 ETH.
The reason Bitmine can continue accumulating during a market downturn is multifaceted. The primary reason is that Bitmine's funding comes from equity issuance:
- When establishing the DAT company with an ETH treasury in June last year, Bitmine secured initial startup capital of $250 million, along with small PIPE financing.
- After July last year, Bitmine mainly relied on ATM equity issuance, gradually increasing this limit from $2 billion to $24.5 billion.
Sufficient capital gives Tom Lee ample confidence, and Bitmine's book cash supports further accumulation. In its public announcement on June 1st, Bitmine also stated: Its holdings in Beast Industries are valued at $180 million; its holdings in Eightco Holdings are valued at $93 million. The company's total cash stands at $446 million.
Additionally, Tom Lee also previously stated that Bitmine's Ethereum treasury generates $1 million daily in staking rewards. This refers to Bitmine staking approximately 87% (about 4.71 million ETH) of its ETH holdings through its MAVAN staking network, with an estimated annualized yield of around 2.73%-3% (approximately $250-300 million), providing a relatively stable cash flow.
In summary, Bitmine is in a healthy financial position; and the latest preferred share offering with a 9.5% annual dividend is expected to raise $300 million, further easing its financial pressure. The main risk for the company lies in equity dilution (issuing new shares) and further stock price declines due to book losses. If mNVA remains below 1, it could trigger a stock sell-off.
Strategy's Debt Leverage Game: Convertibles and Preferred Dividend Pressure
Compared to Bitmine's approach of "buying ETH with investors' money," Strategy faces greater financial pressure to buy BTC, as it primarily relies on "borrowing money to accumulate BTC."
According to Strategy's official website, it currently holds approximately $6.7 billion in convertible debt, along with about $9.9 billion in STRC preferred shares and varying amounts of STRD, STRK, and STRF, requiring substantial annual dividend and interest payments. At the end of May, after repurchasing $1.5 billion in convertible debt, Strategy's cash reserves dropped to about $871 million, covering only roughly 6 months of its estimated $1.7 billion annual preferred dividend obligations.
Furthermore, Strategy previously initiated a vote proposing to increase STRC dividend payments from once to twice monthly, which began on April 28th and will conclude at the meeting on June 8th. If approved, the first record date under the new schedule would be June 30th, with the first payment date on July 15th. Shareholders eligible to vote (MSTR and STRC holders) must have held shares before April 17th.
Additionally, it's worth noting that the authorized issuance limit for STRC is approximately $28.3 billion. Possibly affected by BTC's continued decline and waning market confidence, STRC fell below $95 this morning and is currently trading at $94.65, "de-pegging" by over 5% from its $100 target price.
Compared to Bitmine, Strategy currently faces a significant gap between high preferred share financing amounts and dividend payment obligations, exacerbated by BTC's continued decline. Unlike ETH, which offers staking yields, BTC lacks a comparable staking ecosystem to generate additional liquidity.
Therefore, after Strategy sold 32 BTC last month, the market began to doubt the "diamond hands, only-buy-never-sell" identity of Strategy. As BTC continues to fall, Strategy could face a series of liquidity crises, potentially leading to an inability to service debt or pay dividends, and subsequently selling more BTC, creating downward pressure. Essentially, Strategy is playing a high-leverage debt game, betting that BTC's price won't fall below a certain level.
Consequently, given Strategy's current mNAV of 0.83, the market remains highly skeptical of its future stock performance. Yesterday, its market cap fell out of the top 200 US companies. Currently, Strategy(MSTR) stock is trading at $126, down 7% in 24 hours, with a market cap of $44.6 billion.
Of course, as fellow leaders of DAT treasury companies, Bitmine Chairman Tom Lee remains quite bullish on Strategy. He previously stated: "Strategy selling Bitcoin and ETF outflows are typical bottoming behaviors, not risk signals." And at the recent "Proof of Talk 2026" conference at the Louvre in Paris, Tom Lee went so far as to claim: "Driven by major changes in financial infrastructure from AI and tokenization, ETH could ultimately reach $250,000." However, when asked about "Bitmine's actions after ETH holdings reach 5% of the total supply," he also expressed caution regarding further ETH accumulation. (See "Tom Lee Recharges Belief: Crypto Spring Has Arrived, ETH Will Rise to $250,000")
Currently, Bitmine and Strategy find themselves in very similar market positions, though Bitmine's financials are slightly healthier. Strategy faces a choice between "selling more BTC to generate cash flow for dividends" and "continuing to borrow and accumulate or staying put as BTC's price continues to fall."
