BitMine (BMNR) Stock Plunges 11% as Tom Lee Points to Market Maker Stress

TLDR

• BitMine stock dropped nearly 11% in morning trading as crypto-linked equities face pressure
• Tom Lee blames the selloff on market makers damaged during the October 10 liquidation event that wiped out $20 billion
• Lee says impaired market makers are reducing trading operations, creating a liquidity shortage across crypto markets
• The company holds unrealized losses of $3.7 billion on its Ethereum holdings as ETH prices continue sliding
• Lee expects the market maker cleanup process to take several more weeks, similar to an eight-week recovery period in 2022

BitMine Immersion Technologies stock crashed 10.83% this morning. The selloff reflects broader pressure across crypto-linked equities as market structure issues continue to weigh on prices.

Bitmine Immersion Technologies, Inc., BMNR

Tom Lee, chairman of BitMine and co-founder of Fundstrat, offered a specific explanation for the weakness. He pointed to market makers who suffered serious damage during the October 10 liquidation event.

Speaking with CNBC, Lee said the $20 billion wipeout caught market makers off-guard. These players now face balance sheet problems that are forcing them to reduce operations.

This forced selling is what Lee believes is driving down Bitcoin, Ethereum, and crypto-related stocks. The pattern has persisted for weeks as damaged market makers continue unwinding positions.

Market Makers Function as Crypto’s Liquidity Engine

Lee described market makers as essential infrastructure for crypto markets. He compared their role to central banks in traditional finance.

When these players are impaired, the entire market struggles to function properly. Lee said this explains why price weakness may continue even though fundamentals remain intact.

The damage to market makers created a ripple effect. Their reduced capacity to provide liquidity is now showing up across multiple asset classes.

Bitcoin was trading above $121,000 before the crash. It has since dropped back to around $86,900. Ethereum and other digital assets followed the same trajectory.

Recovery Timeline Could Take Several More Weeks

Lee expects the cleanup process to require more time. He referenced a similar episode in 2022 that took nearly two months to stabilize.

The unwinding process creates temporary pressure that doesn’t reflect actual demand for crypto assets. Lee argues this is a liquidity event, not a fundamental breakdown.

BitMine now operates as one of the world’s largest holders of Ethereum. The company faces unrealized losses of nearly $3.7 billion on its ETH holdings.

The stock has stalled under the weight of market maker selling and ETF outflows. BitMine expanded its Ethereum exposure earlier this year when sentiment supported long-term growth.

That confidence now meets a different reality as price corrections push portfolio values down. Large holders feel deeper shocks because big positions create more friction when markets turn.

Traders fear that any major selloff from institutions could trigger sharper declines. This fear increases volatility as retail investors react quickly to large portfolio shifts.

Analysts now watch ETH wallet activity closely to identify any movements that hint at restructuring or liquidation. Many institutions act more carefully as uncertainty spreads across crypto markets.

Lee’s explanation frames the current weakness as a temporary liquidity event that needs time to clear. If his timeline proves accurate, the pressure may ease in the coming weeks as market makers repair their balance sheets.

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