Ethereum DATs Heavily Underwater as ETH Price Drops Below $3,000

Ethereum-focused digital asset treasury (DAT) companies are facing pressure as most of them built their stockpiles at higher than current prices, and are now sitting on billions in paper losses.

ETH is currently trading around $2,940, down 28% this month, and about 41% from the new all-time high of $4,946 it set on Aug. 24.

BitMine Immersion (ticker: BMNR), the largest public holder of ETH, chaired by Tom Lee, appears to be the most exposed among ETH DATs. Strategic ETH Reserve, which tracks entities accumulating ETH on their balance sheets, shows BitMine holding more than 3.6 million ETH, which is 3% of Ethereum’s total supply.

But data from the BMNR Treasury Dashboard indicates that the average purchase price for that stack is above $4,000, leaving Lee’s company around $4.2 billion underwater on an unrealized basis.

In a Nov. 24 press release from Bitmine, Lee commented that the overall market decline in the past week reflects the “impaired liquidity since October 10th, as well as price technicals, which remain weak.” According to Lee, the downside sits around 5-7%, while the upside could come from the “supercycle ahead for Ethereum.”

It’s also worth noting that on Nov. 19, BitMine disclosed in its 8-K regulatory filing with the U.S. Securities and Exchange Commission (SEC) that the firm hired market-timing specialist Tom DeMark to “optimize” its acquisition strategy.

Meanwhile, SharpLink Gaming, the second-largest Ethereum treasury company, is also deep in the red. The company — chaired by Consensys founder Joseph Lubin — holds about 860,000 ETH at an average cost of roughly $3,600, per data from CoinGecko. That puts it around $587.4 million below break-even at current prices.

The Ether Machine, the third-largest ETH holder with around 497,000 ETH, might be underwater too. But it’s hard to tell by how much as the company hasn’t shared a single average cost for all its ETH purchases.

Press releases only list specific buys, like a 10,605 ETH purchase at about $3,781, announced in early August. The company also received a 150,000-ETH in-kind commitment valued at roughly $654 million, suggesting much of its stack was acquired in the high $3,000s to low $4,000s.

Selling Pressure

Some DAT firms have already started selling some of their stash. ETHZilla, the ninth-largest corporate ETH holder, announced in late October that it had sold about $40 million of its ETH and used proceeds to repurchase about 600,000 of its shares for roughly $12 million under a previously authorized $250 million buyback program.

Despite the repurchase, which, as The Defiant previously reported sparked mixed reactions on X, ETHZilla shares (ticker: ETHZ) are down more than 40% year-to-date (YTD), according to Yahoo Finance.

The thirteenth-largest ETH treasury firm, FG Nexus, also recently sold some of its stockpile, revealing last week that it sold 10,922 ETH in late October to fund a share repurchase. its shares, trading on the Nasdaq under the ticker FGNX, are down nearly 90% YTD.