After a week of double-digit declines for Bitcoin and Ethereum, the crypto market appears to be stabilizing. Fundstrat head of research Tom Lee, chair of Ethereum treasury firm BitMine Immersion Technologies, suggested that the sell-off may be nearing its bottom.
“All the pieces are in place for crypto to be bottoming right now,” Lee told CNBC’s Squawk Box on Monday.
He emphasized that the $3.6 trillion industry’s fundamentals remain strong, citing growing activity on the Ethereum network. “If that’s the case, crypto prices should follow,” he added.
BitMine, which transitioned from Bitcoin mining to buying Ethereum in June, aims to acquire 5% of the total Ethereum supply, approximately 6 million tokens, and stake them to earn yield. The firm counts major institutional investors among its backers, including Ark Invest CEO Cathie Wood, Peter Thiel’s Founders Fund, crypto exchange Kraken, and Galaxy Digital.
Heavy paper losses for BitMine
Despite the optimistic outlook, BitMine faces substantial losses. The firm purchased most of its 4.3 million Ethereum holdings at an average price of $3,800 to $3,900 per token. Ethereum has dropped 53% from its $4,946 all-time high in August and currently trades around $2,300, its lowest level since June.
The decline places BitMine’s Ethereum position among the five largest potential financial losses ever if the firm were to sell its holdings. The digital asset treasury now sits on $6.95 billion in unrealized losses, according to CoinGlass data.
Market factors behind Ethereum’s slump
Lee attributes the recent price weakness to two main factors. First, leverage has not returned to the crypto market since the October 10 crash. Second, a surge in precious metals prices has shifted investor appetite away from riskier digital assets. Lee compared the gold rally to the 1979-1980 bull market, highlighting that fluctuations in precious metals can directly affect crypto capital flows.
“This is not a reflection of the underlying strength of Ethereum,” Lee said.
He pointed out that Ethereum daily transactions hit an all-time high of roughly 2.8 million on January 15, while active addresses peaked at around 1 million per day in 2026. During prior crypto winters in 2018 and 2022, Ethereum activity and wallet use declined, but the past 12 months show the opposite trend.
BitMine views pullback as a buying opportunity
Despite paper losses, BitMine continues to increase its Ethereum stake. The firm acquired an additional 41,788 tokens in early February, bringing its total holdings to 4.28 million ETH, or 3.55% of the total supply. About 2.897 million ETH are now staked, generating $188 million in annualized yield. Lee reiterated that the company sees the pullback as a long-term opportunity.
“In our view, the price of ETH is not reflective of the high utility of ETH and its role as the future of finance,” Lee said.
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— Bitmine (NYSE-BMNR) $ETH (@BitMNR) February 2, 2026
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BitMine provided its latest holdings update for February 2nd, 2026:
$10.7 billion in total crypto + "moonshots":
- 4,285,125 ETH at $2,317 (@coinbase)
- 193 Bitcoin (BTC)
- $200 million stake in Beast Industries @MrBeast
- $19 million stake in Eightco Holdings (NASDAQ:…
Pressure on other treasury firms
BitMine is not alone. SharpLink Gaming, the second-largest Ethereum treasury firm, faces $1.09 billion in paper losses. Market Net Asset Values (MNAV) for these firms have fallen below 1, making fundraising through share issuances more difficult.
Bitcoin treasury firms also face stress. Michael Saylor’s Strategy, the largest Bitcoin treasury firm, recently saw Bitcoin fall below its average purchase price for the first time since 2023. Unlike BitMine, Strategy uses leverage, increasing the risk of forced sales during price declines. Saylor maintains confidence, stating,
“The company’s engineered to take an 80 to 90% draw down and keep on ticking. I think we’re pretty indestructible.”
Outlook for Ethereum
Lee predicts a potential short-term drawdown to around $1,800 before a broader recovery later in 2026. Market participants are closely watching key support levels around $2,150. Ethereum staking and institutional accumulation provide stability for long-term holders. As Ether tests its bottom, investors remain cautious but monitor opportunities for entry, particularly as on-chain activity and wallet use continue to grow.
Tanya Petrusenko
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