Both suffer over $9 billion in unrealized losses – which is more dangerous, Strategy or Bitmine?

Original｜Odaily Planet Daily (@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 now hovering around $1,780. At current prices, Strategy's unrealized losses have reached an astonishing ~$10 billion; Bitmine's unrealized losses are also around $9 billion. For the moment, Michael Saylor and Tom Lee are "fellow sufferers in a fallen world," with Strategy and Bitmine ranking as the top two "companies with the largest losses among DAT firms."

However, compared to Strategy, which must continuously pay dividends, Bitmine faces less financial pressure and retains flexibility, such as raising capital through STRC preferred shares. It is reported that Bitmine plans to raise $300 million by issuing perpetual preferred shares with an annual dividend yield of 9.5%. This suggests that Bitmine's pace of increasing its ETH holdings continues; meanwhile, the Damocles sword hanging over Strategy is — where will the funds come from to pay subsequent dividends on STRC preferred shares? Between the two, who faces greater financial pressure? Odaily Planet Daily will provide readers with analysis.

Bitmine VS Strategy: Divergent Paths for DAT Crypto Holdings

With today's BTC crash, community members used AI to create a satirical image of Saylor "promoting" BTC: "An old man in his sixties personally selling off; ancestral BTC now as low as $62,000 a coin."

Returning to Bitmine and Strategy, currently, Bitmine's financial structure appears safer, while Strategy faces 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 the total ETH supply, close to the "5% upper limit" repeatedly emphasized by Bitmine Chairman Tom Lee. Yesterday, Bitmine again added 25,000 ETH through BitGo, worth $48 million at the time, bringing its total holdings to 5,441,901 ETH.

The confidence for Bitmine to continue increasing holdings during a market downturn stems from multiple factors. The primary reason is that Bitmine's funding source is equity issuance:

• When establishing the ETH Treasury DAT company in June last year, Bitmine secured initial startup capital through financing: $250 million, plus a small PIPE investment.
• After July last year, Bitmine primarily relied on ATM equity issuances, gradually increasing this figure from $2 billion to $24.5 billion.

Sufficient funds provide Tom Lee with ample confidence, and Bitmine's on-book cash also supports further accumulation. In its official announcement on June 1st, Bitmine also mentioned: The company holds an equity stake in Beast Industries worth $180 million; and an equity stake in Eightco Holdings worth $93 million. The company's total cash stands at $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% of its ETH holdings (about 4.71 million ETH) through its MAVAN staking network, with an estimated annualized yield of roughly 2.73%-3% (approximately $250-300 million), providing a relatively stable cash flow.

In summary, Bitmine enjoys sound financial health; and the latest preferred share financing with an annualized dividend of 9.5% is expected to raise $300 million, further alleviating its financial pressure. For the company, the biggest risk points lie in equity dilution (issuing new shares) and further stock price declines caused by book losses; if mNAV remains below 1, it could potentially trigger a stock sell-off.

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 buying BTC, primarily because it is "borrowing money to increase BTC holdings."

According to Strategy's official website, Strategy currently holds approximately $6.7 billion in convertible debt, plus about $9.9 billion in STRC preferred shares, along with STRD, STRK, and STRF of varying market values, requiring massive annual dividend and interest payments. At the end of May, after repurchasing $1.5 billion in convertible debt, Strategy's cash reserves fell to approximately $871 million, only enough to cover its estimated $1.7 billion annual preferred dividend obligation for about 6 months.

Furthermore, Strategy previously initiated a vote on a proposal to increase STRC dividend payments from once to twice a month. The vote began on April 28th and will conclude on the meeting date of June 8th. If the proposal is approved, the first equity record date under the new schedule would be June 30th, with the first dividend payment date on July 15th. Eligible voting shareholders (holders of both MSTR and STRC shares) must have held shares by April 17th.

Additionally, it is worth noting that the authorized issuance cap for STRC is approximately $28.3 billion. Possibly impacted by the continued decline of BTC and shaken market confidence, STRC fell below $95 this morning, currently trading at $94.65, "de-pegging" over 5% from its $100 target price.

Compared to Bitmine, Strategy currently faces a significant gap issue: the high amount raised through preferred share financing versus its dividend payment obligations, exacerbated by the ongoing decline of BTC. Furthermore, unlike ETH, which generates staking yields, BTC lacks a comparable staking ecosystem to provide additional liquidity.

Therefore, after Strategy sold 32 BTC last month, the market began to doubt its identity as a "diamond hand that only buys, never sells." As BTC continues to decline, Strategy may face a series of liquidity crises, potentially unable to service debt or pay dividends, leading to further BTC sales that could depress the market. Essentially, Strategy is playing a "high-leverage bet that BTC's price won't fall below a certain level" debt leverage game.

Consequently, given Strategy's current mNAV of 0.83, the market remains highly skeptical about its future stock performance. Yesterday, its market cap fell out of the top 200 US companies by market value. Currently, Strategy (MSTR) stock is trading at $126, down 7% in 24 hours; its market cap stands at approximately $44.6 billion.

Of course, as a fellow leader of DAT treasury companies, Bitmine Chairman Tom Lee still holds a positive view of Strategy. He previously stated: "Strategy's Bitcoin sales and ETF outflows are typical bottoming behavior, not risk signals." And at the recent "Proof of Talk 2026" conference at the Louvre in Paris, Tom Lee boldly predicted: "As AI and tokenization drive major changes in financial infrastructure, ETH could eventually reach $250,000." However, when asked about Bitmine's actions after its ETH holdings reach 5% of the total supply, he also expressed caution regarding further accumulation. (See "Tom Lee Recharges Belief: Crypto Spring Has Arrived, ETH Will Rise to $250,000")

Currently, Bitmine and Strategy find themselves in highly similar market positions, but Bitmine's financial situation is slightly better. Strategy, on the other hand, faces a choice between "selling more BTC to generate cash for dividends" and "continuing to borrow and accumulate or holding steady while watching BTC's price decline."