Until last July, chances are, most crypto investors had never even heard of Bitmine Immersion Technologies (BMNR 2.38%). At the time, it was a relatively tiny Bitcoin (BTC 1.11%) mining company that had fallen out of favor with investors years ago.
But something fascinating happened in July. Bitmine Immersion Technologies transformed into an Ethereum (ETH 0.96%) treasury company, and began buying Ethereum like there was no tomorrow. The company now holds 3.5% of all Ethereum in circulation, and ranks as the biggest corporate holder of Ethereum in the world. For those reasons alone, it could be worth a closer look by crypto investors.
How to value a crypto treasury company?
The big question, of course, is whether Bitmine Immersion Technologies is fairly valued at a current price of $26. That's a steep discount from the $161 price it had been trading at during the summer. The current price gives Bitmine Immersion Technologies an implied market cap of roughly $12 billion.
Image source: Getty Images.
And that's where things get really interesting. That's because Bitmine Immersion Technologies currently holds 4.24 million ETH on its balance sheet. At today's prices, that's worth a staggering $11.6 billion.
So, assuming that Bitmine still hasn't issued any debt to help finance its purchases, in order to determine if Bitmine is fairly valued, all you have to do is compare its market cap to the value of its Ethereum holdings. Right now, the company is trading at a multiple of 1.03. That's extremely low, and as close to parity as you're going to get.
In other words, investors are basically saying that nothing else at Bitmine Immersion Technologies has any value at all, the only thing that matters is the Ethereum stash. It's a bit like valuing a company, and only giving it credit for the available cash on its balance sheet.
NYSEMKT: BMNR
Key Data Points
That's not the way things are supposed to work with crypto treasury companies. They are supposed to trade at big-time premiums. Bitmine even brought aboard high-profile Wall Street strategist Tom Lee of Fundstrat as its chairman, in the hopes that he could do for Ethereum what Michael Saylor of Strategy has done for Bitcoin. That move alone should imply a much higher multiple for Bitmine.
But in 2026, the strategy is not working. Bitmine continues to buy Ethereum, Tom Lee continues to give unbelievably high price targets for Ethereum, but the price of Ethereum just won't budge. It's now trading at a 45% discount to its all-time high from August.
Ethereum or Ethereum treasury company?
At the end of the day, I'm buying Ethereum, and not an Ethereum treasury company. Investors simply are not getting paid for the additional risk that they are being asked to take on. If Bitmine Immersion Technologies is going to trade at the same value as its Ethereum holdings, why not just buy Ethereum?
This perhaps helps to explain why Bitmine's stock has been going nowhere fast recently. It looks like the company's multiple is eventually going to converge to 1, or perhaps even go lower.
For now, I'm avoiding the new-fangled crypto treasury companies. They had their moment, but it's now time to move on to better investment opportunities elsewhere.
