BitMine Nearing Inflection Point as Ethereum Buying Nears Key Target
BitMine Immersion Technologies (NYSE:BMNR) is nearing an inflection point as its Ethereum (CRYPTO: ETH) accumulation nears the end, while its valuation becomes highly attractive.
BMNR was trading at $15.80 on Friday, down substantially from last year’s high of $160. It remains slightly above the year-to-date low of $12.86.
BitMine Immersion Will Hit Its 6 Million Target Soon
BitMine has accumulated over 5.77 million ETH coins, which are now valued at over $11 billion. This means that the company needs to buy 222,532 Ethereum coins, currently worth over $422 million. If the trend continues, it will hit its 6 million target in the coming months.
Completing the purchases will benefit BitMine’s shareholders in two main ways. First, it will likely conclude the dilution that has pushed its outstanding shares to 603 million from less than 239 million last year.
Second, the company will now transition from being a highly dilutive firm into a cash generator. It will achieve that through staking its Ethereum holdings, which will generate about 3% annual return. The estimated annual return will be about 180,000 coins, which are now valued at over $342 million.
Estimates by two analysts are that BitMine’s annual revenue will jump to $125 million this year. They also expect that the revenue will jump to $429 million next year.
For example, SharpLink (NASDAQ:SBET), a similar company, has already generated 23,918 ETH tokens in revenue since it started staking its tokens.
BitMine Has Become Highly Undervalued
Meanwhile, there are signs that the company is highly undervalued. It has a market capitalization of $9.52 billion, much lower than its Ethereum holdings of $11 billion.
In addition to Ethereum, it also owns a $180 million stake in Beast Industries, $58 million stake in Eightco (NASDAQ:ORBS), and $385 million in cash and marketable securities. It also owns 207 Bitcoin (CRYPTO: BTC), currently worth over $13.2 million.
Most notably, unlike Strategy (NASDAQ:MSTR), BitMine has no debt. Its only liability is from its preferred stock, which is expected to cost it almost $40 million a year.
The company also plans to use its free cash flow to start repurchasing its stock, with Lee targeting $4 billion over time. These events, and the potential Ethereum rebound, may lead to a strong recovery over time. Benzinga data shows that the consensus target among analysts is $28, much higher than where it is today.
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