Both suffer losses exceeding $90 billion. Which is more dangerous, Strategy or Bitmine?
- Core Viewpoint: In the ongoing downturn of the cryptocurrency market, major companies Strategy and Bitmine are both facing massive unrealized losses, but their financial strategies differ significantly: Bitmine maintains flexibility through equity financing and staking income, while Strategy faces greater liquidity risk due to high leverage debt and dividend payment pressure.
- Key Elements:
- As of now, with BTC at approximately $63,800 and ETH at approximately $1,780, Strategy's unrealized loss is about $10 billion, and Bitmine's unrealized loss is about $9 billion.
- Bitmine holds approximately 5.44 million ETH (accounting for 4.49% of the supply). It supports its holdings through equity financing (an ATM plan of up to $24.5 billion) and staking income (earning $1 million daily), resulting in lower financial pressure.
- 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 but only $871 million in cash reserves, which can cover only six months.
- Strategy's STRC preferred stock has fallen below $95 (de-pegging by over 5%), and it recently sold 32 BTC, shaking the market's confidence in its "only buy, never sell" stance.
- Bitmine plans to issue preferred stock with an annual dividend yield of 9.5% to raise $300 million, further alleviating financial pressure. Its biggest risk is equity dilution and stock price decline.
Original｜Odaily Planet Daily (@OdailyChina)
Author｜Wenser (@wenser 2010 )
As the market continues to decline, Strategy and Bitmine, the "DAT Treasury Duo," are both facing massive unrealized losses.
This morning, BTC briefly fell below $62,000 and is currently hovering around $63,800; ETH dropped below $1,800 and is now around $1,780. Based on current prices, Strategy's unrealized loss has reached a staggering ~$10 billion; Bitmine's unrealized loss has also reached ~$9 billion. For now, Michael Saylor and Tom Lee find themselves in the same boat, with Strategy and Bitmine ranking as the top two companies with the largest losses among DAT companies.
However, compared to Strategy, which must continuously pay dividends, Bitmine faces less financial pressure and retains flexibility, such as raising funds through STRC preferred shares. Reportedly, Bitmine plans to raise $300 million by issuing perpetual preferred shares with an annual dividend yield of 9.5%. From this perspective, Bitmine's pace of accumulating ETH continues; the Damocles sword hanging over Strategy, however, is the question: Where will the funds come from for subsequent STRC dividend payments? Between the two, who faces greater financial pressure? Odaily Planet Daily will provide readers with an analysis.
Bitmine VS Strategy: Divergent Paths of DAT Holdings
With today's BTC plunge, community members used AI to create a parody of Saylor "promoting" BTC: "An elderly man personally promotes his family's BTC at a low price of $62,000 each."
Returning to Bitmine and Strategy, currently, Bitmine’s financial structure appears safer, while Strategy is under greater leverage pressure.
Bitmine's Equity Issuance Game: A Debt-Free DAT Strategy
As of June 1st, Bitmine holds 5,416,901 ETH; approximately 4.49% of ETH's total supply, nearing the "5% upper limit" frequently emphasized by Bitmine Chairman Tom Lee. Yesterday, Bitmine again acquired 25,000 ETH through BitGo, worth $48 million at the time, bringing its total holdings to 5,441,901 ETH.
The reason Bitmine has the confidence to continue accumulating even during a market downturn is multifaceted. The primary reason is that Bitmine's capital source is equity issuance:
- When establishing the ETH treasury for the DAT company last June, Bitmine secured initial startup capital through financing—$250 million, along with a small PIPE investment.
- After July last year, Bitmine primarily relied on ATM equity issuances, gradually increasing this capacity from $2 billion to $24.5 billion.
Ample funds provide Tom Lee with sufficient confidence, and Bitmine's on-paper capital supports further accumulation—In a public announcement on June 1st, Bitmine also noted: Its stake in Beast Industries is valued at $180 million; its stake in Eightco Holdings is valued at $93 million. The company holds total cash of $446 million.
Additionally, Tom Lee has previously stated that Bitmine's Ethereum treasury generates $1 million in daily 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's financial situation is healthy; the latest preferred stock financing with an annual dividend yield of 9.5% is expected to raise $300 million, further alleviating its financial pressure. The biggest risk factors for the company are equity dilution (issuing new shares) and further stock price decline due to book losses. If mNAV remains < 1 persistently, it could trigger stock sell-offs.
Strategy's Debt Leverage Game: Convertible Bonds and Preferred Dividend Pressure
Compared to Bitmine's "buying ETH with investors' money," Strategy faces greater financial pressure in acquiring BTC, primarily because it "borrows money to accumulate BTC."
According to Strategy's official website, Strategy holds approximately $6.7 billion in convertible debt, plus about $9.9 billion in STRC preferred shares and varying amounts of STRD, STRK, STRF, requiring substantial annual dividend and interest payments. After repurchasing $1.5 billion in convertible debt at the end of May, Strategy's cash reserves dropped to approximately $871 million, enough to cover only about six months of its estimated $1.7 billion annual preferred dividend obligations.
Furthermore, Strategy previously initiated a vote to increase STRC dividend payments from once to twice per month, which started on April 28th and will end on the meeting date of June 8th. If the proposal is 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 (holders of both MSTR and STRC shares) must hold their shares before April 17th.
Additionally, it's worth noting that the authorized issuance limit for STRC is approximately $28.3 billion. Potentially affected by BTC's continued decline and market sentiment, STRC fell below $95 this morning and is currently around $94.65, "de-pegging" by over 5% from its $100 target price.
Compared to Bitmine, Strategy currently faces a significant gap between high preferred stock financing amounts and dividend obligations, exacerbated by BTC's continuous decline. Unlike ETH, which has staking ecosystems for additional liquidity, BTC offers no such option.
Therefore, following Strategy's sale of 32 BTC last month, the market has begun to doubt its "diamond hands, buy-only" identity. WithBTC continuing to fall, Strategy could face a series of liquidity crises, potentially leading to an inability to service debt and dividends, forcing further BTC sales. Essentially, Strategy is playing a "high-leverage game betting that BTC's price won't fall below a certain level."
Consequently, with Strategy's current mNAV ratio of 0.83, the market harbors significant doubts about its future stock performance. Yesterday, its market cap dropped out of the top 200 US companies by market value. Currently, Strategy (MSTR) shares are trading around $126, down 7% in 24 hours; its market cap is approximately $44.6 billion.
Of course, as a fellow leader of DAT treasury companies, Bitmine Chairman Tom Lee remains quite optimistic about Strategy, previously stating: "Strategy's Bitcoin sales and ETF outflows are typical bottoming behaviors, not risk signals." More recently, at the "Proof of Talk 2026" conference at the Louvre in Paris, Tom Lee boldly predicted: "Driven by major changes in financial infrastructure driven by AI and tokenization, ETH could eventually reach $250,000." However, when discussing "Bitmine's behavior after reaching 5% of total ETH holdings," 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 are in highly similar market positions, but Bitmine's financial situation is slightly better; Strategy faces the choice between "selling more BTC to generate cash flow for dividends" and "continuing to borrow and accumulate or standing pat while watching BTC decline."
