Kerrisdale Capital has taken a short position in BitMine Immersion (BMNR), the ether-focused digital asset treasury firm led by Fundstrat’s Thomas Lee, calling its business model a relic of a bygone crypto era.
In a detailed report published Wednesday, the well-known short seller said BitMine’s strategy mirrors that of Strategy (MSTR) – issuing shares at a premium to buy cryptocurrencies and increasing token per share metrics – but argued that market conditions no longer support that model.
“BMNR is pursuing a model that is on the path to extinction,” Kerrisdale wrote. “Shortage and meme-like enthusiasm once kept premiums high despite constant dilution, but those conditions have disappeared.”
Months ago, Kerrisdale shorted the strategy against a long position in bitcoin, noting that the company’s premium to net asset value was not sustainable. So far, the trade has turned out to be quite profitable.
Las Vegas-based Bitmine has undergone a dramatic turnaround over the past year, transforming from a niche bitcoin miner to an ether-rich corporate treasury. With Fundstrat co-founder Thomas Lee as CEO, BitMine has raised more than $10 billion since July 2025, primarily through ATM share sales, and acquired more than 2.8 million ETH.
The stock, after soaring from around $5 to over $100 on the launch of its ether treasury strategy, has fallen back to around $58 in its latest trading.
Kerrisdale said the pace of that stock issuance, about $170 million a day, has “turned initial enthusiasm into fatigue.” The report criticizes BitMine’s latest $365 million capital raise, marketed as a premium deal, as a “discounted giveaway” once the terms of the collateral are taken into account.
The firm also took aim at Lee himself, saying his presence lacks the gravitational pull needed to maintain investor confidence. “Tom Lee brings recognition as a strategist and television commentator, but he doesn’t have the kind of cult following that made Michael Saylor a meme icon,” the report says.
While Kerrisdale said he remains bullish on ether, he sees no justification for paying a premium through brokers like BitMine. “If you want ETH, buy it directly,” the company wrote.
Adding to the pressure is an avalanche of new competition. More than 150 US-listed companies are reportedly planning $100 billion in crypto treasury offerings, and a next wave of Ethereum ETFs are expected to offer lower-cost, more transparent exposure.
Kerrisdale said BitMine’s disclosures have become increasingly opaque. ETH growth per share has slowed sharply in recent months, even as token holdings increased. “The reflective loop on which each DAT is based had begun to stagnate,” the company wrote, noting that BitMine’s market premium fell from 2.0x in August to around 1.2x in October.
“The strategy is generic, competition is multiplying, disclosures have become opaque, ETH per share has slowed,” Kerrisdale concluded. “BMNR premium set to sink”.
A Bitmine representative did not respond to a request for comment. The company’s shares fell 2% on Wednesday.
