Tom Lee’s BitMine Plans $300M Preferred Stock Sale for ETH Treasury Push

Ethereum treasury firm BitMine is seeking to raise up to $300 million through the sale of 3 million preferred shares to support ETH purchases, staking, validator infrastructure, and related investments.

If BitMine’s board approves the payments, the Series A preferred shares would have a $100 stated amount and pay a 9.50% annual cash dividend in weekly installments, according to a preliminary prospectus filed with the SEC on Wednesday. BitMine has applied to list the shares on the NYSE under the ticker BMNP.

Native ETH staking is now its “principal revenue source,” with 4.7 million ETH staked through its MAVAN platform as of May 25, putting projected annualized staking revenue at about $276 million, the company said in Wednesday’s filing.

BitMine’s strategy builds on its move from Bitcoin mining into an ETH treasury business, as its ETH holdings crossed $1 billion last year.

Wednesday’s filing follows BitMine’s latest purchase of 26,497 ETH worth about $52 million, bringing its holdings to 5,416,901 ETH, or about 4.48% of Ethereum’s supply, with roughly $446 million in cash. Strategy, meanwhile, sold about $2.5 million of Bitcoin to help fund dividends on its own preferred stock.

BitMine’s preferred stock plan follows months of large ETH purchases, including a buy that pushed its holdings past 5 million ETH in April, a $151 million purchase in May after Lee called ETH’s drop below $2,200 an “attractive opportunity,” and another $237 million buy the following week that brought the firm to more than 88% of the way toward its goal of holding 5% of Ethereum’s supply.

(Disclosure: Tom Lee is one of nine angel investors in Dastan, the parent company of an editorially independent Decrypt.)

Decrypt has reached out to BitMine for comment and will update this article should they respond.

Yields and tradeoffs

A BitMine preferred stock product could differ from Strategy’s STRC because ETH staking gives BMNR a protocol-native income source, according to an earlier analysis from Alchemy Research in April. Staking rewards could help support cash dividends while allowing the rest of the ETH rewards to keep compounding, the research firm said.

In that model, a large staked ETH treasury could help cover preferred dividends because higher ETH prices would lift the dollar value of staking rewards, since “rising ETH price directly strengthens the preferred program,” the firm wrote.

But the structure still depends on ETH rewards being converted into dollars at the right price and time.

If it works, the setup could “reduce cash drag, support dividend sustainability, and help mitigate common share dilution through on-chain yield generation,” Dominick John, analyst at Zeus Research, told Decrypt.

BitMine could earn revenue by staking ETH to help run the network and by using MEV optimization, which helps validators capture extra transaction-related rewards, to support the 9.50% dividend, John added.

The broader bet still comes down to Lee’s conviction in ETH, especially as Strategy’s STRC remains under pressure, according to Ryan Yoon, senior analyst at Tiger Research.

Tom Lee “heavily trusts ETH” and sees it as his “only viable hedge,” Yoon told Decrypt.

“Even if STRC tanks, he feels compelled to buy the dip, seeing it as a perfect entry point,” Yoon said, adding that ETH’s staking yield gives BitMine a “major differentiator” that could allow BitMine to utilize it as a dividend stream.