BitMine Immersion chairman Tom Lee pushed back against criticism of its growing paper losses this week, saying the drawdown reflected the design of its ethereum treasury strategy rather than a flaw in execution.

In a series of posts on X, Lee said BitMine is built to track the price of ether and outperform it over a full market cycle, likening its structure to an index-style product rather than a tactical trading vehicle.

With crypto markets in a downturn, however, the firm said unrealized losses on its ETH holdings are inevitable.

“Crypto is in a downturn, so naturally ETH is down,” Lee wrote, adding that paper losses are “not a bug — it’s a feature,” and questioning whether similar scrutiny is applied to index funds during market declines.

The comments follow recent reporting showing BitMine sitting on more than $6 billion in unrealized losses after ether’s slide pulled the value of its 4.24 million ETH holdings down to about $9.6 billion from nearly $14 billion in October.

The firm added more than 40,000 ETH shortly before the latest leg lower, intensifying focus on its balance-sheet exposure.

BitMine has framed itself as an ether treasury company rather than a discretionary buyer, with its strategy centered on long-term ETH accumulation and staking yield rather than short-term price timing.

That's a similar approach used by some bitcoin-focused treasury firms, which argue that volatility is the cost of maintaining long-duration exposure to a core asset.

But the scale of BitMine’s holdings means price swings have an outsized impact on reported results, particularly during periods of thin liquidity and forced selling across derivatives markets.

While the firm has previously estimated annual staking revenue of around $164 million, that income provides only limited offset during sharp drawdowns.

Chairman Tom Lee has struck a more cautious tone on near-term market conditions, warning that crypto is still working through a deleveraging phase that could extend into early 2026.

Lee's latest comments, however, make clear that the company remains committed to its thesis.

“Bottom line,” the firm said, “ethereum is the future of finance.”