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Both Suffering Over $9 Billion in Losses, Which One Is More Dangerous: Strategy or Bitmine?

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Compared to a strategy relying on debt and preferred stock financing, Bitmine's current financial structure has more cushioning capability thanks to equity issuance, cash reserves, and ETH staking rewards.

Original Title: "Double Whammy: Over $9 Billion USD in Unrealized Losses, Which is More Dangerous, Strategy or Bitmine?"
Original Author: Wenser, Odaily Planet Daily

Amidst the continued market downturn, the "DAT Treasury Titans" Strategy and Bitmine have both suffered massive unrealized losses.

This morning, BTC briefly dropped below $62,000, currently trading around $63,800; ETH also dropped below $1,800, currently around $1,780. At current prices, Strategy's unrealized losses have reached a staggering approximately $10 billion, while Bitmine's unrealized losses have also reached around $9 billion. In a moment, Michael Saylor and Tom Lee found themselves in the same boat, and Strategy and Bitmine became the top two "DAT companies with the highest losses."

However, compared to Strategy, which requires continuous dividend payments, Bitmine faces less financial pressure and has retained flexibility through fundraising methods like STRC preferred stock. It is reported that Bitmine plans to raise $300 million through the issuance of perpetual preferred shares with a 9.5% annualized dividend. In this light, Bitmine's accumulation of ETH continues, while the sword of Damocles hanging over Strategy has become—where will the funds come from for future STRC dividend payments? Between the two, who faces greater financial pressure? This will be analyzed for the readers.

Bitmine VS Strategy: Divergent Paths in the DAT Treasury

With today's BTC plunge, community members used AI to mockingly promote Saylor's BTC influence: "A sixty-year-old man personally promotes BTC, ancestral BTC price as low as $62,000 per coin."

Returning to Bitmine and Strategy, it is evident that Bitmine's financial structure is more secure, while Strategy faces greater leverage pressure.

Bitmine's Equity Issuance Game: Debt-Free Financing Strategy in the DAT Ecosystem

As of June 1st, Bitmine holds 5,416,901 ETH; approximately 4.49% of the ETH supply, nearing the "5% cap" emphasized by Bitmine's chairman Tom Lee on multiple occasions. Yesterday, Bitmine once again increased its ETH holdings by 25,000 ETH through BitGo, valued at $48 million at the time, bringing its total holdings to 5,441,901 ETH.

The reason Bitmine continued to accumulate during the market downturn is multi-faceted. The primary reason is that Bitmine's source of funds is from equity issuance:

· In June of last year, when starting the ETH Treasury to establish DAT Corporation, Bitmine obtained initial funding through financing — $250 million, along with a small PIPE financing.

· After July of last year, Bitmine mainly relied on ATM equity issuance, gradually increasing this figure from $20 billion to $245 billion.

The ample funding gave Tom Lee enough confidence, and Bitmine's balance sheet also supported further accumulation — as mentioned in Bitmine's June 1st announcement: The company holds $180 million worth of shares in Beast Industries; $93 million worth of shares in Eightco Holdings. The company's total cash balance is $446 million.

In addition, Tom Lee has also made high-profile statements that Bitmine's Ethereum Treasury generates daily staking rewards of $1 million. This refers to Bitmine staking approximately 87% (about 4.71 million ETH) of its ETH holdings through its MAVAN staking network, with an expected annual return of about 2.73%-3% (approximately $2.5-3 billion), providing a relatively stable cash flow.

In summary, Bitmine is in good financial health; and the latest annualized preferred stock financing document with a dividend yield of 9.5% will receive $3 billion in funding, further alleviating its financial pressure. For the company, the biggest risk lies in equity dilution (issuance of new shares) and further stock price decline due to unrealized losses on the balance sheet. If the mNVA continues to be <1, it may trigger stock sell-offs.

Strategy's Debt Leverage Game: Convertible Bonds and Preferred Stock Dividend Pressure

Compared to Bitmine's "using investor money to buy ETH" strategy, Strategy faces greater financial pressure from buying BTC because its main approach is "borrowing money to accumulate BTC."

According to Strategy's official website, currently, Strategy holds approximately $670 million in convertible bond debt, plus around $990 million in STRC preferred stock and varying market value of STRD, STRK, STRF, with significant annual dividend and interest payments. By the end of May, after repurchasing $1.5 billion of convertible debt, Strategy's cash reserves decreased to around $871 million, covering only about 6 months of its estimated $1.7 billion annual preferred stock dividend obligation.

Moreover, Strategy had previously initiated a vote on "Proposal to Increase STRC Dividend Payment from Monthly to Bi-Monthly," which started on April 28 and will conclude on the meeting day of June 8. If approved, the first ex-dividend date under the new schedule would be June 30, with the first payment date on July 15. Eligible voters (comprising MSTR and STRC shareholders) must have held their shares before April 17.

Additionally, it is worth noting that the authorized issuance cap of STRC is approximately $28.3 billion. Possibly affected by the continuous decline in BTC and a hit to market confidence, STRC fell below $95 this morning, currently trading at $94.65, slipping over 5% from the $100 target price, causing a "de-peg."

Compared to Bitmine, Strategy is currently facing challenges due to the ongoing BTC downturn, a significant gap between preferred stock financing and dividend payments, and unlike ETH with staking rewards, BTC lacks an alternative staking ecosystem for increased liquidity.

Therefore, after selling 32 BTC last month, doubts have arisen in the market about the identity of "Diamond Hands Strategy," known for only buying and not selling. During a continuous BTC downturn, Strategy may encounter a series of liquidity crises, leading to defaults on debt and dividends, prompting further BTC sell-offs. Essentially, Strategy is playing a debt-leveraged game of "high-stakes bet that BTC price will not drop to a certain level."

Hence, considering Strategy's current mNAV value of 0.83, the market remains highly skeptical about its future stock performance. Yesterday, its market cap fell out of the top 200 U.S. companies by market cap. Currently, Strategy (MSTR) is trading at $126, with a 24-hour decrease of 7%; the market cap stands at $44.6 billion.

Of course, as both leading companies in the DAT treasury space, Bitmine's Chairman, Tom Lee, remains quite bullish on Strategy. Previously, he stated: "Selling Bitcoin by Strategy and ETF outflows are typical bottoming behaviors, not risk signals." At the recent "Proof of Talk 2026" summit at the Louvre Palace in Paris, Tom Lee even made a bold statement: "With AI and tokenization driving significant changes in financial infrastructure, ETH may eventually reach $250,000." However, when referring to actions after "Bitmine's ETH holdings reach 5% of the total," he also expressed caution in increasing ETH holdings.

Currently, Bitmine's market situation is highly similar to that of Strategy, but its financial condition is slightly better. Strategy, on the other hand, is facing a decision between "selling more BTC to generate cash flow for dividend payments" and "holding onto its BTC while continuing to increase leverage or staying put amid continued BTC price decline."