Key Takeaways
Why did BitMine double ETH?
Lee sees ETH as the most important macro trade of the decade, driven by the growth of AI and rising institutional demand.
Will ETH price rise higher?
That was a possibility. But the bulls could get stuck near $5,000 again if the whale sell-off peaks.
Tom Lee’s BitMine Immersion (NYSE: BMNR) has increased its value Ethereum [ETH] owns up to $13.2 billion.
In one statement on October 6, the company said it had acquired 2.83 million ETH tokens and 192 Bitcoin [BTC] in addition to $456 million in cash.
Collectively, BitMine is now the second largest corporate crypto treasury, behind Michael Saylor’s strategy.
Source: ETH Strategic Reserve
According to Fundstrat CIO and BitMine Chairman Tom Lee, ETH remains the “biggest macro trade” of the decade that will be powered by AI and crypto.
He added that the ETH price is still at a “discount” going forward, and that his company will therefore be eyeing 5% of the total ETH supply (6 million ETH).
“We remain convinced that the two supercycle investment stories remain AI and crypto…Given that ETH’s price is a discount for the future, this bodes well for the token and is the reason BitMine’s main treasury asset is ETH.”
In other words, BitMine was only halfway to its ETH accumulation target (about 3.2 million ETH to go).
‘Legendary’ accumulation and shortage of ETH supply
Bitwise CEO Hunter Horsley greets the aggressive ETH accumulation achieved in less than six months as ‘legendary’.
That said, total ETH treasury holdings and ETFs reached 5.66 million ETH worth $26.45 billion in October, an increase of more than $4 billion since the second quarter.
Source: ETH Strategic Reserve
Although US ETH ETF inflows have moderated slightly in the fourth quarter compared to the third quarter, collective demand from crypto government bonds and ETFs could drive the recovery in ETH prices.
Moreover, the ETH supply crisis seems to be approaching.
Since July, the ETH Exchange Reserve has fallen from over 20 million ETH to 16.1 million at the time of writing. That’s about 4 million ETH gone from the exchanges or a 20% drop in available supply.
Source: CryptoQuant
This could dampen massive ETH corrections. In fact, with the activation Investing in the Grayscale ETH ETF could help restore demand for ETFs, especially if other issuers follow suit.
Bulls eye $5K, but whales take profit
Meanwhile, the altcoin has recovered 22% from its September low of $3.8K and turned bullish after defending $4.5K as support.
Source: ETH/USDT, TradingView
A retest of $4.8K and a potential jump to $5K could be feasible. However, the OBV resisted and some whales started book a profit (over $70 million) from the recovery.