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Tom Lee responds to "Ethereum's Reserve Burn Pressure Suppresses Price" Criticism: It's a Feature, Not a Bug
BlockBeats News, February 4th, BitMine Chairman Tom Lee recently responded to market doubts, denying that the company's significant Ethereum unrealized loss reserve will form a "price ceiling" for future ETH prices. He stated that the appearance of unrealized losses on the balance sheet during a market downturn is an "inherent feature of Ethereum reserve strategy, not a design flaw."
Earlier comments suggested that BitMine's holding of ETH had incurred an unrealized loss of about $6.6 billion and believed that these ETH would eventually be sold off, thereby suppressing the price, with Lee even described as the "liquidity exit" of early ETH holders. In response, Lee countered that such views "misunderstood the operational logic of Ethereum reserve companies," and BitMine's goal is to track and outperform ETH performance over a full market cycle, rather than engage in short-term trading.
Data shows that ETH's price has dropped by nearly 30% in the past month, and BitMine's share price has also fallen by about 30% during the same period. Currently, BitMine holds approximately 4.285 million ETH, accounting for about 3.5% of the circulation, making it the largest known publicly traded Ethereum reserve company. Its asset value once approached $14 billion from the end of 2025 to the beginning of 2026, before falling to below $10 billion following a market correction.
Lee analogized the current situation to index ETFs, stating that unrealized losses during a systemic decline are a normal phenomenon, not a strategic failure. The debate surrounding Ethereum reserve companies has heated up once again: critics believe that large reserve companies could become potential sources of selling pressure, while supporters emphasize their closer resemblance to long-term, index-like exposure tools.
From a valuation structure perspective, as the market weakens, the share prices of most Ethereum reserve companies have fallen below their crypto asset net asset value (mNAV), objectively suppressing the incentive for low-level issuance financing and limiting dilution risk. Supporters argue that this mechanism serves as a "natural circuit breaker," preserving ammunition for the next cycle.
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