BitMine, chaired by Tom Lee, has made a splash in the Ethereum market, acquiring approximately $199 million worth of Ether (ETH) over the past two days, despite signals from "smart money" traders who are betting against ETH in the short term. This move highlights a divergence in market sentiment, with BitMine demonstrating strong confidence in the long-term potential of Ethereum even as others anticipate a price decline.
The acquisitions were made in two major transactions. On Friday, BitMine purchased 41,946 ETH for $130.78 million. This was followed by another buy on Saturday, where the firm added 22,676 ETH valued at $68.67 million to its holdings. These purchases bring BitMine's total ETH holdings to over $11.3 billion, representing approximately 3.08% of the total Ether supply. The company is steadily approaching its stated goal of controlling 5% of the Ethereum supply by 2026.
BitMine's accumulation strategy has been consistent, with the company buying ETH through various market cycles. This recent buying spree, however, has drawn attention due to the broader market context. While BitMine has been actively increasing its ETH reserves, data indicates a slowdown in digital asset treasury activity overall. Corporate Ether acquisitions fell by 81% in three months, from 1.97 million ETH in August to 370,000 in November. Despite this slowdown, BitMine accounted for a significant portion of the acquisitions, accumulating 679,000 ETH worth $2.13 billion during the past month.
The timing of BitMine's purchases is particularly noteworthy because "smart money" traders are currently positioned to profit from a potential decrease in Ether's price. These traders, tracked by Nansen's blockchain intelligence platform, have increased their short positions on ETH, with cumulative short positions totaling $21 million. This divergence suggests a difference in outlook, with BitMine betting on long-term appreciation while others anticipate short-term depreciation.
Several factors could be influencing BitMine's bullish stance. Tom Lee has been a consistent advocate for Ethereum, viewing market drawdowns as buying opportunities. The company may also be encouraged by Ethereum's recent Fusaka upgrade, which aims to improve the network's scalability and reduce transaction costs. More broadly, expectations of the Federal Reserve easing monetary policy could be contributing to a more favorable environment for risk assets like Ethereum.
However, analysts point out that Ethereum needs to overcome certain resistance levels to sustain upward momentum. Analyst Ali Martinez has identified targets at $4,800, $6,800, and $8,800, which must be surpassed before considering higher price targets.
