Bitmine sets 5% Ether supply ‘hard cap’ as accumulation target nears

Tom Lee said BitMine will not accumulate Ether past 5% of the supply, turning the company’s target into a ceiling.

BitMine Immersion Technologies will cap its Ether holdings at 5% of the cryptocurrency’s supply, according to Chairman Tom Lee.

Speaking during a keynote at Token2049 in Singapore on Wednesday, Lee said BitMine is nearing the threshold after accumulating roughly 6 million Ether, equivalent to about 4.9% of the supply. He said the company needs about 100,000 ETH more to reach its target.

“That’s a hard cap. We’re not gonna be accumulating past 5%,” Lee said. “We’re not gonna own more than 5% of Ethereum.”

Lee had previously left open the possibility of accumulating more than 5% of Ether’s supply depending on Ethereum adoption. In an August interview with Bankless, he said the company may revisit that possibility in 2027.

BitMine Chairman Tom Lee speaks at Token2049 Singapore. Photo: Aubrey Paller/Cointelegraph

Lee said BitMine accumulated most of its Ether during what he described as a crypto bear market, saying that the company was able to build its position while prices were depressed. 

“We did all this buying in a bear market,” Lee said. “We protected the downside for ETH because we were buying. But now, we’re done stacking in front of a 25X move.”

Lee also tied the 5% hard cap to BitMine’s capital strategy. Stopping its accumulation would remove the need to raise additional funds to keep buying Ether. 

“So if we have a 5% hard cap, that means we’re gonna outperform ETH on the way up, right?” Lee said. “‘Cause you don’t have to worry about us trying to raise capital. We’re done.”

Related: Bitmine projects $334M in annual staking revenue from $15.8B crypto treasury

BitMine has tapped capital markets to build its Ether treasury. In June, the company launched a $300 million perpetual preferred stock offering. By early August, BitMine had repurchased 16.1 million common shares under its $4 billion buyback program.