BitMine Secures 5.74 Million Ethereum… 5% of Supply Within Reach?

▲ Ethereum (Ethereum, ETH) ©CoinReaders

Ethereum (ETH) is struggling to break through key resistance despite large-scale accumulation by companies. BitMine continues to increase its Ethereum holdings, approaching 5% of the supply, but the market sees the dividend burden of cryptocurrency treasury strategy companies as a new variable.

According to investment media FXStreet on July 7 (local time), BitMine Immersion Technologies, an Ethereum Digital Asset Treasury (DAT, a cryptocurrency treasury strategy company), purchased an additional 42,197 ETH last week. As a result, the company's Ethereum holdings increased to a total of 5.74 million ETH, with a value of approximately $10.27 billion at the time of writing. The company also announced that it holds 206 BTC, a $180 million stake in Beast Industries, a $71 million stake in Worldcoin Treasury, an investment in EightCo Holdings (ORBS), and $527 million in cash and marketable securities.

Thomas Lee, Chairman of BitMine, assessed that the likelihood of the US cryptocurrency market structure bill, the CLARITY Act, passing is increasing. He stated that once regulatory clarity is established, it will be a crucial turning point for cryptocurrencies, including the smart contract platform Ethereum, to be more widely used in daily life. The media cited Arkham data, stating that BitMine currently holds approximately 4.75% of Ethereum's circulating supply, and only an additional purchase of $523.7 million is needed to reach its 5% target. This amount can be covered solely by the company's cash holdings.

However, as risk-off sentiment continues across the cryptocurrency market, concerns about digital asset treasury companies are growing. Previously, Strategy sold 3,588 BTC for $216 million to pay preferred stock dividends. As BitMine has also recently issued preferred stock, there are observations that it might have to sell some of its assets if Ethereum's price remains weak for an extended period. In response, Thomas Lee explained that the annual staking revenue alone is sufficient to cover preferred stock dividends. The media reported that BitMine currently stakes the most ETH globally, with 4.87 million ETH, and its annual staking revenue is approximately $235 million.

Technically, Ethereum is trading below its 50-day Exponential Moving Average (EMA) of $1,807 and its 100-day EMA of $1,970, indicating that its mid-term upward trend is still limited. However, it is maintaining above the 20-day EMA of $1,714 and the $1,741 support level, and the Relative Strength Index (RSI) at 58 suggests improving momentum. On the other hand, the Stochastic indicator is near 90, entering the overbought zone, also indicating short-term upward fatigue.

The media presented $1,806 and the 50-day EMA of $1,807 as key short-term resistance levels. If these are broken, $1,909, $2,018, and $2,107 could become the next resistance zones, it analyzed. Conversely, in case of a decline, $1,741 and the 20-day EMA of $1,714 would act as the primary support levels, and further corrections could lead to declines to $1,524, $1,404, and $1,155.

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