BitMine Immersion (BMNR), the largest Ethereum-focused digital asset treasury (DAT) firm and led by Wall Street veteran Thomas Lee, is sitting on steep unrealized losses on its big bet on ether .
The firm on Friday reported $328 million in net income for its fiscal year ended Aug. 31, while fully diluted earnings per share came in at $13.39. It also declared a nominal dividend of $0.01 per share and announced plans to launch a staking infrastructure product, MAVAN (Made-in America Validator Network), in early 2026.
Despite the positive overall earnings, Markus Thielen, founder of 10x Research, warned that the company, as well as other DATs, faces deep structural problems.
The firm is now estimated to be sitting on over $4 billion in unrealized losses on its holdings following a 45% drop in ETH prices since the peak in August. BMNR’s share price is down 84% from its peak in July, with the drawdown erasing the net asset value (NAV) premium that once fueled investor enthusiasm, Thielen noted.
Thielen argued that many Digital Asset Treasury (DAT) firms rely on complex and layered entities such as asset managers, strategic advisors and promotional figureheads with high paychecks while embedding fees that “quietly erode returns.”
He pointed out that BitMine’s management compensation and outside advisors could extract $157 million a year over 10 years through compensation and advisory contracts.
Ether’s return on investment, a key source of income for the crypto holdings, doesn’t look that compelling for investors, Thielen noted. According to the CESR Composite Ether Staking Rate, ether’s staking yield is currently around 2.9%, which is far below the US dollar money market fund’s return, which is considered risk-free. Once operating costs and middlemen are taken into account, the effective dividend to shareholders is far lower, Thielen said.
“No serious institutional allocator will accept” that return, Thielen said, especially when ETH’s “price volatility puts the underlying security at constant risk.”
Thielen warned that DATs could trap shareholders, especially as the NAV premium collapses. “Investors find themselves trapped in the structure, unable to get out without significant damage — a true Hotel California scenario,” he said.
