BitMine Stock May Rebound as Ethereum Buying Nears 5% Target

Key Insights

• BitMine stock has fallen from $160 in July last year to $17 today.
• The company’s Ethereum buying spree is about to end.
• It is set to make millions of dollars in staking revenue.

BitMine stock price has plunged this year, wiping out billions of dollars in value. After soaring to a record high of $160 in June last year, it has slumped to $17 today.

Still, there are some reasons why the BMNR stock will rebound in the coming months as the company nears its goal of Ethereum buying.

One of the main catalysts that may boost BMNR stock is the ongoing Ethereum price rebound. ETH has jumped from the year-to-date low of $1,500 to the current $1,918. This surge may continue as data shows that ETF inflows have jumped.

The funds added over $37 million in assets on Tuesday, bringing the monthly cumulative inflows to over $309 million. That is a sign that demand is rising, which will boost the value of its assets.

While BitMine owns several assets, its core business is Ethereum accumulation. In the last 12 months, it has bought 5.7 million coins that are currently valued at over $11 billion, higher than its market cap of $10.4 billion. When ETH was trading at $1,500, these coins were worth about $8.5 billion.

Another key reason why the BitMine stock may rebound is that the company has become a big bargain. Data shows that the company has a market capitalization of $10.4 billion. It’s lower than the company’s Ethereum holdings, worth about $11 billion.

On top of this, it holds 207 Bitcoin, currently valued at $13 million, and a $58 million stake in Eightco Holdings. It also holds a $180 million stake in Beast Industries. Eightco Holdings is notable because it gives it an indirect exposure to OpenAI. BitMine also has over $385 million in cash and has no debt.

As such, its holdings are now valued at over $11.45 billion, making it an outright bargain using a sum-of-parts approach. The valuation metric will improve if Ethereum price continues rising.

Unlike Strategy, BitMine has an Ethereum accumulation goal. In this case, it hopes to buy 6 million coins and then monetize them through staking. It has accumulated these coins by raising cash through selling shares.

Now, the company needs to buy less than 300k ETH coins. At the current price, it needs to raise another $550 million for this buyout. Its real cash raise may be much smaller than that since it holds $385 million in cash.

Therefore, the dilution trend that has contributed to the stock retreat may be about to end. At the same time, the company will start generating about 180,000 ETH tokens a year.

At the current price, these coins will be worth about $351 million. Yahoo Finance shows that its annual revenue will get to $125 million this year, followed by $429 million next year. These are huge numbers for a company that has less than 10 employees.

These fundamentals likely explain why some of the biggest companies on Wall Street are holding the stock. Vanguard holds 20.34 million shares. On the other hand, Clear Street, Morgan Stanley, Citadel, BlackRock, and ARK Investment hold millions more.

The daily chart shows that the BitMine stock has bounced back in the past few days. It’s moving from a low of $12.90 to the current $17.23. It has already flipped the 25-day moving average into a support level.

BitMine is also attempting to move above the key resistance level of $17.80, its lowest level in February and March. Therefore, the stock will likely continue rising, potentially to the next key target being at $30. This view will be confirmed if it jumps above the resistance at $20.

The post Bullish Case for Tom Lee’s BitMine Stock as Ethereum Buying Nears 5% appeared first on The Market Periodical.