Pantera: After sweeping up 1 million ETH, how should we value BitMine?

This article is from: Pantera;

Original authors: Cosmo Jiang, Erik Lowe

Compiled by: Azuma, Odaily Planet Daily

Editor’s Note: On the evening of August 11, BitMine Immersion Technologies, a publicly listed company on the New York Stock Exchange, announced that as of 10:59 PM Eastern Time on August 10, the company's total ETH holdings had reached 1,150,263 coins, worth over $4.96 billion. This not only makes BitMine the largest ETH treasury company in the world but also the only entity with ETH holdings exceeding 1 million coins.

On the evening of August 12, the U.S. SEC publicly disclosed documents showing that BitMine plans to increase the total amount of common stock available for sale under the sales agreement to a maximum of $24.5 billion to acquire more ETH.

With BitMine's frenzied buying spree, the price of ETH has surged, approaching new highs, while BitMine's stock price has skyrocketed by 1300% since the end of June. In the following text, top industry VC Pantera uses BitMine as an example to break down and analyze the valuation logic of such treasury companies, which may help in understanding BitMine's accumulation strategy and the premium logic of treasury stocks like BMNR.

The following is the original content from Pantera, translated by Odaily Planet Daily.

Our investment theory for digital asset treasury companies (DAT) is based on a simple premise: DAT can enhance the net asset value per share (NAV/share) through yield strategies, and holding it for the long term will yield more underlying token ownership than simply holding spot.

Therefore, compared to directly holding tokens or investing through an ETF, holding DAT shares may have higher return potential.

Pantera has invested over $300 million in DATs focusing on different regions and tokens. These DATs are leveraging their unique advantages to expand their digital asset holdings through a per-share appreciation strategy. Below is an overview of our DAT portfolio.

BitMine (BMNR) Case Study

BitMine Immersion (BMNR) is the first investment of the Pantera DAT fund. BitMine has a clear strategic roadmap and strong execution capability. Tom Lee, founder of Fundstrat and chairman of BitMine's board, has proposed the company's long-term vision of acquiring 5% of the total supply of ETH – which they refer to as "5% Alchemy." We believe it is beneficial to explore its value creation through BMNR as a case study of a high-level execution DAT.

Since BitMine launched its asset treasury strategy, it has become the largest ETH asset treasury and the third largest DAT globally, currently holding a total of 1,150,263 ETH, worth 4.9 billion dollars (as of August 10, 2025).

BMNR is currently the 25th highest liquidity stock in the United States, with an average daily trading volume of approximately 2.2 billion USD (five-day moving average as of August 8, 2025).

Underlying assets: The value support of Ethereum

The success of DAT primarily depends on the long-term investment value of the underlying tokens. The core idea of BitMine is: with the on-chain transformation of Wall Street, Ethereum will become one of the most important macro trends in the next decade. As we mentioned last month, the tokenization of real-world assets (RWA) and the rise of stablecoins are driving the "great on-chain migration" — currently, major public chains have already carried $25 billion in RWA and $260 billion in stablecoins, the latter of which has become the 17th largest holder of U.S. Treasuries.

On July 2, 2025, during the Pantera DAT conference call, Tom Lee stated: "Stablecoins have become the ChatGPT narrative of cryptocurrency."

As the main carrier platform for this major migration, Ethereum will continue to benefit from the growing demand for blockchain space. The reliance of financial institutions on the security of Ethereum will further stimulate their participation in the proof-of-stake network, driving up the demand for ETH accumulation.

Increase "Earnings Per Share (EPS)"

After establishing the investment value of the base token, DAT's business model is to maximize the corresponding token holdings per share. The main methods to increase the "token holdings per share" are as follows:

• Premium issuance of stocks: issuing additional shares at a price higher than the net asset value (NAV) per token;
• Issuing convertible bonds: Profiting from the dual volatility of stocks and tokens;
• Earn on-chain rewards: Acquire more tokens through staking rewards, DeFi yields, etc. (This is a unique advantage of ETH DAT compared to early Bitcoin DAT);
• Acquiring other DATs: The acquisition price is close to or lower than the NAV of comparable companies;

In the first month of launching the ETH treasury strategy, BitMine's per-share ETH holding growth has surpassed the cumulative performance of Strategy (formerly MicroStrategy) in the previous six months. Currently, the growth is mainly achieved through stock issuance and staking rewards, and it may expand to tools such as convertible bonds in the future.

The Three Driving Factors of Value Creation

The stock price of DAT can be broken down into the product of three main elements:

• Number of tokens per share;
• Underlying token price;
• NAV premium multiple (mNAV);

Taking BMNR as an example: At the end of June, the trading price of BMNR was $4.27 per share, approximately 1.1 times its initial NAV of $4 per share after the DAT capital raise; more than a month later, the stock closed at $51 (Odaily note: the current stock price has risen to $62.44, corresponding to a price increase of over 1300% since June 26), about 1.7 times its estimated NAV of $30 per share.

In this more than a month, the price has increased by 1100%:

1. The 330% increase in the number of tokens per share contributed to about 60% of the growth;
2. The price increase of the underlying asset ETH (from $2500 to $4300) contributed approximately 20% to the growth;
3. The increase of mNAV to 1.7 times contributed approximately 20% of the growth;

This indicates that the rise in BMNR's stock price primarily comes from the management's controllable increase in each share of ETH, which is the core advantage that DAT has over spot holdings.

Another factor regarding mNAV that we have not yet explored.

Naturally, people will ask: why would someone purchase DAT at a premium compared to NAV? I think it is useful to draw an analogy with balance sheet-based financial businesses (including banks) here. Banks seek to generate returns on their assets, and investors give valuation premiums to those banks that they believe can consistently produce returns above their cost of capital. The highest quality banks trade at a premium above NAV (or book value), for example, JPM’s trading price exceeds NAV by 2 times. Similarly, if investors believe that DAT can consistently increase its NAV per share, they may choose to value it at a premium to NAV.

We believe that the monthly growth of BMNR's NAV per share of approximately 640% has proven the reasonableness of its mNAV premium. BitMine's ability to continue executing its strategy will become apparent over time, and challenges will inevitably arise along the way. The management team of BitMine and its performance record to date have attracted support from traditional financial institutions, including Stan Druckenmiller, Bill Miller, and ARK Invest. We expect that the growth story of the highest quality DAT will gradually be appreciated by more institutional investors, just like Strategy.