Ethereum Is Bleeding — Tom Lee’s Bitmine Doesn’t Care and Keeps Buying the Dip

Tom Lee Keeps Buying the Ethereum Dip as Prices Slide: What Still Supports ETH in the Long Run

Ethereum has faced repeated pressure over recent months, with its price sliding sharply amid broader weakness across the digital asset market. Risk-off sentiment, forced liquidations, and declining speculative appetite have weighed heavily on major cryptocurrencies, pushing Ether well below its previous cycle highs.

Yet despite mounting losses on paper, one high-profile investor continues to double down.

Tom Lee’s crypto-focused investment firm, Bitmine Inc., has continued accumulating Ethereum even as the asset trades far below the firm’s average purchase price. The move has drawn attention across the crypto community, raising a key question: what supports Ethereum’s long-term value when prices are under such strain?

Bitmine Adds More ETH Despite Market Weakness

According to blockchain data tracked by Arkham Intelligence, Bitmine recently acquired an additional 20,000 ETH, valued at approximately $46 million at the time of purchase. The transaction was executed through FalconX, a major institutional crypto brokerage, and the funds were transferred to a newly created wallet consistent with Bitmine’s established accumulation pattern.

With this latest purchase, Bitmine remains the single largest known institutional holder of Ethereum. The firm now controls an estimated 4.285 million ETH, equivalent to roughly 3.55 percent of Ethereum’s total circulating supply.

A significant portion of these holdings is staked across Ethereum’s proof-of-stake infrastructure, allowing the firm to earn yield while maintaining exposure to the network’s long-term growth. This approach reflects a treasury-style strategy rather than a short-term trading position.

Large Holdings, Large Unrealized Losses

Bitmine’s conviction comes at a cost. The firm accumulated much of its Ethereum position at average prices ranging between $3,650 and $3,883 per ETH. With Ethereum currently trading near the $2,200 level, those holdings represent unrealized losses estimated between $6 billion and $6.6 billion.

Source: $BMNR Stock

While these losses remain unrealized, they underscore the severity of Ethereum’s recent drawdown and the scale of Bitmine’s exposure.

The pressure has also been reflected in the firm’s equity performance. Shares of Immersion Technologies, trading under the ticker BMNR and closely associated with Bitmine’s ETH strategy, have declined sharply alongside Ethereum.

On February 3, BMNR closed at $22.35, down nearly 2 percent on the day, before falling further in after-hours trading. Longer-term performance has been more severe, with the stock down over 20 percent in the past month, more than 46 percent over six months, and roughly 20 percent year-to-date.

These declines have intensified scrutiny of Bitmine’s Ethereum-heavy treasury model.

Tom Lee Defends the Ethereum Treasury Strategy

In response to growing criticism, Tom Lee has defended the firm’s approach, arguing that the market is misinterpreting both the risks and the objectives of an Ethereum-focused treasury.

Lee has emphasized that Bitmine’s strategy is designed to track Ethereum’s value across full market cycles, not to avoid short-term volatility. He noted that large unrealized losses during sharp market downturns are a natural and expected feature of long-duration crypto exposure.

According to Lee, the focus is on long-term network adoption, yield generation through staking, and Ethereum’s role as foundational infrastructure for decentralized finance, tokenization, and digital payments.

This perspective aligns with the behavior of other institutional players that have continued to accumulate or hold ETH during periods of market stress.

Why Ethereum’s Price Keeps Falling Despite Strong Holders

Ethereum is currently trading around $2,278, down roughly 2 percent over the past 24 hours and extending its weekly decline to more than 23 percent. From its 2025 cycle peak, Ether has lost over half of its value.

Source: CMC

Importantly, analysts note that this weakness is not driven by a failure of Ethereum’s technology or network activity. Instead, several macro and market-specific forces are converging.

First, market-wide deleveraging has reduced speculative exposure across crypto assets. As leverage unwinds, prices often overshoot to the downside regardless of fundamentals.

Second, sentiment has shifted sharply toward fear, with investors prioritizing liquidity and capital preservation over growth assets.

Third, Ethereum’s technical structure remains bearish, with key support levels broken during recent selloffs.

Finally, headlines surrounding institutional losses, including Bitmine’s unrealized drawdowns, have added psychological pressure, even though those losses do not reflect forced selling.

Ethereum’s Fundamentals Remain Strong

Despite price volatility, Ethereum’s on-chain and ecosystem fundamentals continue to show resilience.

The network remains the leading platform for real-world asset tokenization, with more than $11.4 billion worth of tokenized assets currently deployed. This includes tokenized bonds, funds, and other financial instruments increasingly used by institutions seeking blockchain-based settlement.

Ethereum-based exchange-traded funds have also grown significantly. ETH-linked ETFs now hold approximately $13.39 billion in total net assets, highlighting sustained institutional demand even during market downturns.

Stablecoins represent another pillar of Ethereum’s strength. The total market capitalization of stablecoins issued or settled on Ethereum stands near $160 billion, reinforcing its role as the backbone of digital dollar infrastructure.

Decentralized exchange activity on Ethereum has surged as well. Recent data shows weekly DEX volume of roughly $18.5 billion, representing a more than 56 percent increase week over week. This suggests that while prices are down, network usage remains active.

Developer engagement remains robust, and upcoming protocol upgrades aimed at scalability, efficiency, and user experience continue to attract long-term builders.

Institutional Support Extends Beyond Bitmine

Bitmine is not alone in its conviction. Other major institutions, including BlackRock and SharpLink, have maintained or expanded their exposure to Ethereum through ETFs, custody solutions, and infrastructure investments.

This broader institutional interest reflects Ethereum’s perceived role as the dominant smart contract platform rather than a speculative asset alone.

For many institutions, Ethereum represents programmable financial infrastructure, supporting decentralized applications, payments, lending, gaming, identity, and tokenized assets.

That long-term thesis remains intact despite near-term price declines.

Ethereum’s Outlook Heading Into 2026

Looking ahead, Ethereum enters 2026 under pressure but not without support. The asset faces ongoing volatility, regulatory uncertainty in some jurisdictions, and competition from alternative blockchains.

However, its network effects, developer ecosystem, and institutional integration continue to differentiate it from competitors.

If broader market conditions stabilize and risk appetite returns, Ethereum’s strong fundamentals could support a meaningful recovery. Yield from staking, growth in real-world asset tokenization, and expanding stablecoin usage all provide structural demand drivers.

At the same time, investors should recognize that Ethereum remains a high-risk asset, subject to sharp price swings and macroeconomic shocks.

Final Thoughts

Tom Lee’s decision to continue buying Ethereum during a downturn highlights a growing divide between short-term market sentiment and long-term institutional conviction.

While Ethereum’s price has struggled, its underlying network activity, institutional adoption, and role within the digital economy remain strong. For investors with long time horizons, these fundamentals may ultimately outweigh near-term volatility.

Whether Ethereum’s current downturn marks a prolonged consolidation or the foundation for a future rebound will depend on broader market conditions, regulatory clarity, and continued execution at the protocol level.

For now, the message from large holders like Bitmine is clear: despite losses on paper, the long-term case for Ethereum remains intact.

hokanews.com – Not Just Crypto News. It’s Crypto Culture.

Writer @Erlin
Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.
 
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