BitMine (BMNR), Despite Ethereum (ETH) Staking Profits... $84 Million 'Deficit Swamp'

▲ Tom Lee, Ethereum (ETH), BitMine (BMNR), Bear Market/AI-Generated Image

BitMine Immersion Technologies earned $45.7 million in one quarter from Ethereum (ETH) staking. During the same period, its net loss reached up to $84 million. Even a revenue-generating cryptocurrency treasury strategy could not prevent a sharp price decline.

Louis Raskin, host of the cryptocurrency YouTube channel Coin Bureau, analyzed BitMine's treasury strategy in a video uploaded on August 3 (local time). After transitioning into an Ethereum treasury company, BitMine recorded total revenue of $46.5 million for the quarter ending May 31, 2026. Of this, 98%, or $45.7 million, came from staking and validation businesses. Total revenue for the same period last year was approximately $2 million, meaning revenue increased by about 22 times in one year.

As of mid-July 2026, BitMine held approximately 5.77 million ETH, which is about 4.8% of the total Ethereum circulating supply. Of its holdings, approximately 4.92 million ETH, or 85%, was deployed for staking. Tom Lee, Chairman of BitMine, projected that annual revenue would reach $284 million if all remaining holdings were staked. In contrast, Strategy, which holds approximately 845,000 BTC as a treasury asset, does not generate separate cash flow. Strategy sold 32 BTC in June 2026 to fund preferred stock dividends.

Raskin pointed out that staking rewards cannot be viewed the same as operating profits generated from external customers. A significant portion of the rewards is paid in newly issued Ethereum by the network. While holders participating in staking avoid dilution, non-participating holders bear the burden of increased supply. Validator operations also come with risks such as slashing, smart contract vulnerabilities, and operator centralization. Since late 2020, the percentage of validators that have been slashed is approximately 0.04%. Lido controls about 25% of the total staked volume.

The projected annual revenue of $284 million represents a return of 2.7-3.2% when compared to BitMine's Ethereum treasury asset value. Network staking yields declined from approximately 5.5% in 2023 to 2.6-3.8%. While BitMine recorded quarterly staking revenue of $45.7 million, its final net loss amounted to $82 million to $84 million. Unrealized losses of approximately $92 million occurred from Ethereum treasury assets and derivatives. A 9.5% annual cash dividend on preferred stock is also a fixed burden that must be paid regardless of price.

Regulations and network operating policies could also shake BitMine's revenue structure. In 2023, the U.S. Securities and Exchange Commission (SEC) imposed a $30 million settlement on Kraken's staking service and halted services to U.S. customers. While the regulatory stance has since softened, the relevant guidelines are not laws and can change. There is also a possibility that validator rewards could decrease with future Ethereum protocol revisions. Raskin described investing in BitMine as “leveraged investing, adding limited returns to highly volatile assets.”

[Article Summary]

-BitMine earned $45.7 million, or 98% of its total quarterly revenue of $46.5 million, from Ethereum staking.

-The estimated annual staking revenue is $284 million, but the return on assets held is only 2.7-3.2%.

-BitMine recorded a net loss of up to $84 million in the same quarter, indicating that staking profits alone could not defend against price declines.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*