BitMine距持有5%ETH仅一步之遥，创始人详解资本策略

Bank Nation, I am once again joined by Tom Lee, the chairman of the board at Bitmine, the world's largest ETH holder. Tom, welcome back to Bankless.

Thank you.

Good to be back.

Tom, it's been it's been about 1 year and 2 months since Bit Mine was first announced as an ETH treasury company. And uh along with that, the announcement of the intention to buy 5% of the supply of ether. I remember both Ryan at the time, Ryan and I, we were just like, 5%. He's never going to get to 5%. That's so hot. And here we are 14 months later, uh, Bitmine is almost at 4.9% of the ETH supply bought in 14 months.

Uh, so we're basically there. Um, how did you do that in such a short amount of time? There are many graveyards in the DAT landscape and Bitmine is not one of them and in fact I think Bitmine has exceeded people's expectations with how much ETH it has been able to put on the balance sheet. How to what do you credit the success?

Not in any particular order. I would first of all start by saying I think uh the investors who followed us on this journey and have stuck with us um have told us that they've really appreciated uh our consistent and very simple messaging. You know, we kept it very simple because we said we wanted to keep uh the capital structure clean and the whole endeavor was funded with equity, no debt, uh no convertible instruments.

Um the second is that we uh wanted to make this about really helping the Ethereum ecosystem. That's why we targeted 5% because we thought that was a level that was going to be enough to hold enough that would be uh significant but also be important balance and I think that's really played out this year especially with the Ethereum Foundation uh sort of reshaping and focus on crops you know we've been the lead investor in um each of the seeds and spinouts um I think the second key has been and this has been important to me I I I've treated investors as intelligent people, you know, so I wasn't trying to sell them uh a story that would just try to get the stock to go up, but we really focused on understanding this is a multi-year time frame.

In fact, Michael Sailor even mentioned that in a recent podcast. You know, when someone asked him about the stock price, he says, "You got to really think of it in four year time frames." And I think that's correct. you know, we weren't trying to sell people on this idea that the stock would go up every week because something was going to happen. Um, so we've treated people intelligently that way. And I think a third is, um, it does take a little bit of a, you know, luck and good fortune.

Um, but I think we did time everything pretty correctly because we've been, we had been able to raise all of this capital at above NAV. So we've been accreatively growing Ethereum held per share. Uh I know from inception to now it's up by more than 10 times. So when the original transaction was done at 450 a share uh we've dramatically increased the amount of ETH held per bit share and that's of course why the stock is above 450 which is really when the original transaction was done.

Well, one of the most notable things to me about Bitmine is the consistency behind uh the ETH purchases. I I think this is true is that Bit has bought ETH every single week uh since the inception of the whole like ETH treasury strategy. Not even Michael Sailor and Strategy have done that. You know, Strategy has has had many weeks where they haven't bought any Bitcoin and some weeks where they've sold Bitcoin. the and so that's the I think the most astounding thing is the consistency with the cash purchases.

How are you able to do that?

Yeah, it's been over 60 weeks of continuous purchases of Ethereum. Um and we have throttled down the velocity of our purchases partly um in cons consultation with the foundation. you know, we had spoken to them and you know, in the midst of this transition and sort of refocus, I think it would have not made sense for us to be viewed as a centralizing entity. So, I think we've marching our way slowly to 5%. We're at, you know, at at just about 5.82 million.

It's I think we're like 97% of the way there. Uh but we've been able to um do execute purchases uh because I think it's been pr prudent capital and cash management. Um we don't raise money every week. Um and uh but we've really wanted to every week we decide you know what is the best use of cash. Uh so some weeks we have been doing only exclusively ETH purchases but for the last 5 weeks uh we've done a combination of stock buyback and Ethereum purchases.

So I think we judge really what is the expected future return of our deployment of that capital. the crypto industry is watching Michael Strategy Micro Michael Sailor uh post these these announcements of like you know raised you know hundred million dollars from an ATM um of of MSTR and that's really the way that that strategy has been able to raise cash and that's kind of people's frames of reference. Um, but I'm curious as to how how Bitmine has been simultaneously raising cash and also buying back uh the Bitine equity when our only comparable that we really have a strategy who is selling the equity in order to raise cash.

So where is the cash actually coming from?

It's several things and I think it's disclosed in our cues as well. Um you know our main source of cash is selling common equity when it trades above net asset value. Um but we have been very have been doing that sparingly partly because part of us selfishly thinks you know ETH if ETH is going to make a big move between now and your end um then we do have to be a lot more tactical because part of it is of course you want to have stack some ETH um but then of course it makes sense to even buy back stock because now you're concentrating um increasing ETH per share.

So we're really uh weighing that every week. But something else that we have been able to do is you know um you know we do selectively do um tried to buy ETH below spot. I think that saves us uh a lot of capital. I think we haven't really bought ETH at spot prices for for most of the last um 14 months. So we've been able to uh to buy it at a discount. So I that's been accreative for shareholders as well is to buy ETH at a discount.

We did do a preferred perpetual preferred stock offering in June. Um that was very successfully um launched. Um it was more than five times overs subscribed. Um and and that was issued at 80% of par. So was issued essentially at um $80 cuz each unit BMNP is $100 worth and uh today I think it closed at like 91. So it's been a really strong performing preferred stock offering and uh it's yielding you know 9 and a half% and that pays a dividend every week.

Um, so it's a week, it's the only of the 175 largest preferred stock offerings out there. Uh, it's the only one that pays a dividend every week. I think there's a, you know, like we, and I, you know, I we don't reveal this, but we look at our menu of sort of capital availability and, you know, we we have a huge menu of, um, available options, but today, you know, we've kept it very, very simple.

What's the timeline for actually hitting that 5% number? I know you said uh we're at something north of 4.8%. 8% and you've also said you've slowed down the actual ETH purchases. Do you have like a kind of a target timeline for when that 5% number is actually hit? And then what happens at 5%. Is that is that it? Will no more ETH be bought past 5%. Let's see. So on the first part of your question, David, um you know, it's about $350 million worth of ETH um that we need to acquire to reach 5%.

And um you know we're we could reach it by the end of the year. Um it could happen sooner. I'd say it's still one of these things that for the moment part of it is just making sure that the ETH narrative is actually um clear with investors and I think it's coming together. For instance, if the Clarity Act passed, uh I think we would have probably accelerated our timeline to get