BitMine may reach 5% Ethereum holdings cap in six weeks

BitMine Immersion Technologies may stop buying Ethereum once its holdings reach 5% of the cryptocurrency’s total supply, Chairman Tom Lee said at TOKEN2049 in Singapore.

“We only need to get another 100,000 ETH to get to 5%,” Lee said. The company held 6,016,414 ETH on Oct. 4, equal to about 4.9% of the 122.1 million ETH supply used in its calculations.

Based on those figures, BitMine would need about 88,586 additional ETH to reach the 5% limit. At an illustrative price of $2,500 per ETH, the purchase would cost about $221 million. BitMine reported $643 million in cash and marketable securities in its latest disclosure.

The company acquired 15,112 ETH in the week ended Oct. 4. If it maintained that pace, it would reach the limit in about 5.9 weeks, or around mid-November. Buying 20,000 ETH per week would shorten the period to about 4.4 weeks, while buying 10,000 ETH per week would extend it to about 8.9 weeks. These are projections, not company guidance.

A reported Oct. 7 transaction involving the purchase of 12,500 ETH through BitGo could reduce the remaining amount to about 76,086 ETH if confirmed by BitMine. The transaction was not included in the company’s official holdings update and is excluded from the estimates above.

BitMine held about 5.07 million staked ETH on Oct. 4, representing roughly 84% of its holdings. The company estimated that its staked ETH could generate about $363 million in annualized revenue.

Staking its entire ETH balance could increase annualized revenue to about $431 million, based on an estimated annual yield of 2.63%. Staking rewards would add ETH to BitMine’s holdings and could push the company above the 5% limit without further purchases.

BitMine has not detailed how it would manage any ETH above the threshold or adjust its staking activity. The number of ETH equal to 5% of the supply could also change if Ethereum’s total supply rises or falls.