Kerrisdale Capital, an investment management firm, has taken a short position in BitMine Immersion (BMNR), claiming that the company’s business model belongs to a “bygone crypto era.”
The U.S.-based short-selling firm shared a post on X, citing that BitMine’s digital asset treasury (DAT) model is outdated and losing its appeal in a crowded market.
“The DAT playbook has become basic and unoriginal,” Kerrisdale said in the post. He claimed that competition has erased the scarcity that once supported high premiums on such crypto-related stocks.
Kerrisdale Says BitMine’s Strategy Is Out of Date
According to Kerrisdale, BitMine’s approach is similar to that used by MicroStrategy, which involves selling new shares at a premium to buy cryptocurrencies and raise token-per-share figures.
But the firm said those days are over. “BMNR is chasing a model that is on its way to extinction,” the report stated. “Scarcity and meme-like enthusiasm once kept premiums high despite constant dilution, but those conditions have vanished.” Kerrisdale added that a surge in new entrants and over $100 billion in planned crypto-treasury offerings have overwhelmed the market, which leaves little room for premium valuations.
From Bitcoin Mining to Ether Treasury
Based in Las Vegas, Bitmine this year changed its focus from being a small Bitcoin mining business to an ether-heavy corporate treasury. The firm is led by Fundstrat co-founder Thomas Lee, also known as Tom Lee, as executive chairman.
The company has raised $10 billion since July 2025, mostly through at-the-market stock sales, and accumulated about 2.8 million ETH. Its stock once soared from $5 to over $100 after it launched its ether treasury plan but has since dropped to around $58, as per market data.
In the report on X, Kerrisdale said BitMine’s non-stop stock issuance, which is roughly $170 million per day, has worn investors down. The firm also criticized BitMine’s $365 million equity raise, marketed as a premium deal, and called it a “discounted giveaway” when warrant terms were considered.
Thomas Lee Takes Heat Over Leadership Style
The report also made a comment about Thomas Lee, saying, “Tom Lee brings name recognition as a strategist and television commentator, but he does not command the kind of cult-like following that turned Michael Saylor into a meme-stock icon.”
Kerrisdale further mocked Lee’s style, saying, “Tom Lee has proven to be an underwhelming meme lord. Too TradFi and boring.” The firm claimed that BitMine’s premium to net asset value had fallen from 2.0x in August to about 1.2x in October and could keep dropping. “The strategy is generic, the competition is mushrooming, disclosures have grown opaque, ETH-per-share has slowed,” Kerrisdale wrote. “BMNR’s premium is destined to sink.”
However, Kerrisdale added that it still supports ether but does not see the point of buying it through companies like BitMine. “If you want ETH, just buy it directly,” the firm wrote. BitMine’s premium value has already dropped from twice its asset value in August to about 1.2 times in October. Kerrisdale ended its report by warning, “BMNR’s premium is destined to sink.”
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