Bitmine Immersion Faces Criticism from Kerrisdale Capital for Unsustainable Strategy

TLDR

• Kerrisdale believes Bitmine’s share issuance strategy is unsustainable.
• Bitmine’s stock has dropped from $100 to $58 amid shrinking market premiums.
• Over 150 companies are competing in crypto treasury offerings, challenging Bitmine.
• Kerrisdale advises investors to buy ETH directly instead of through Bitmine stock.

Kerrisdale Capital has targeted Bitmine Immersion (BMNR), the digital asset treasury firm led by Thomas Lee of Fundstrat, by taking a short position in the company. Kerrisdale argues that Bitmine’s business model is outdated and no longer viable, as the market has changed and investor enthusiasm has faded. The firm also claims that Bitmine’s strategy of issuing shares to buy crypto is unsustainable in current conditions.

Kerrisdale Capital Takes Short Position

Kerrisdale Capital has taken a short position against Bitmine Immersion (BMNR), criticizing the company’s business model. In a report released on October 8, 2025, Kerrisdale noted that Bitmine’s approach is similar to that of MicroStrategy, issuing shares at a premium to acquire cryptocurrency assets.

However, Kerrisdale believes this strategy is no longer supported by the current market conditions. The report argues that the scarcity and enthusiasm which once boosted the company’s stock are now absent. Kerrisdale sees Bitmine’s stock issuance strategy as unsustainable and predicts the company’s market premium will continue to decline.

Business Model Under Scrutiny

Bitmine has raised over $10 billion since July 2025, largely through at-the-market (ATM) stock sales. The company pivoted to an ether-focused treasury strategy, under the leadership of Thomas Lee. While the firm’s stock initially surged from about $5 to more than $100, it has since pulled back to $58.

Kerrisdale criticizes the rapid pace at which Bitmine has raised funds, pointing out that the premium to net asset value is shrinking. The short-seller firm also highlighted that the company’s recent equity raise, which was marketed as a premium offering, was in fact a discounted deal when accounting for the terms of the warrants.

Lee’s Role in Investor Confidence

The report also takes aim at Bitmine’s executive chairman, Thomas Lee. Although Lee is well known as the co-founder of Fundstrat and for his media presence, Kerrisdale argues that his influence is insufficient to sustain investor enthusiasm.

The firm compared Lee to Michael Saylor of MicroStrategy, noting that while Saylor’s presence helped propel his company’s stock, Lee does not command the same level of investor loyalty or cult-like following. According to Kerrisdale, this lack of leadership appeal may hinder Bitmine’s ability to maintain its stock price.

Increased Competition and Market Conditions

Kerrisdale points to the growing competition in the cryptocurrency treasury market as another reason for Bitmine’s challenges. Over 150 U.S.-listed companies are reportedly planning to raise over $100 billion for crypto treasury offerings.

Additionally, the anticipated launch of Ethereum ETFs is expected to offer more transparent and cost-effective exposure to cryptocurrency, further diminishing Bitmine’s unique position. Kerrisdale also notes that Bitmine’s growth in ETH-per-share has slowed down, with the market premium falling from 2.0x in August to around 1.2x in October 2025.

Kerrisdale concluded that Bitmine’s strategy is no longer effective and that its market premium is set to continue falling. The firm also suggested that investors would be better off purchasing ETH directly instead of buying into Bitmine’s stock, which now comes at a premium.

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