For those with a bullish projection, this could be a good buying point.
The risk that Bitmine will have to sell ETH to meet obligations increases.
Bitmine Immersion Technologies, a treasury company focused on ether (ETH), the Ethereum cryptocurrency, is going through a delicate moment in the market.
The company led by Tom Lee currently holds more than 4 million ETH, valued at about $12 billion, and total assets of $13.2 billion, including $1 billion in cash.
Despite this support, its shares are trading below its net asset value (mNAV)reflecting a gap between the market price and the real value of its assets.
As CriptoNoticias has explained, the mNAV measures whether the total market value of a company is greater or less than the value of its ETH reserves (or the asset it accumulates in its treasury).
If the indicator is below 1, it means that the market is valuing the company below the value of its ETH reserves. This can be seen as a buying opportunity for some investorswhile others interpret it as a sign of uncertainty.
Pau Galindo Ortigosa, financial market analyst, points out that the fact that the mNAV is less than 1 implies risks because “sustained financial pressure could force the company to liquidate part of its ETH reserves to meet its obligations.”
That is, this situation could lead the company to sell large amounts of ETH, which would increase the supply in the market and could cause the price of the cryptocurrency to drop.
The other risk is that it could undermine confidence in ETH, and call into question its role as a reserve asset in corporate treasuries. This, as was recently seen with Strategy, the company with the largest reserves of bitcoin (BTC).
The firm led by Michel Saylor faced market turbulence when doubts arose about its ability to maintain its holdings and meet its financial commitments.
This could generate bitcoin price volatility and concern also among other companies with less support, which could be forced to sell part of their reserves.
A similar scenario could occur with ETH if large public treasuries, such as Bitmine, which holds more than 3% of the asset’s total supply, face financial pressures or are forced to sell part of their reserves.