"Earns 200 million won a day with Ethereum"…World’s largest ETH holder accelerates staking

Secure an additional 100 billion won in annual profit

Use staking to shore up DAT weaknesses

"Possibility of more Ethereum treasuries"

"Could act as upward pressure on the price"

Bitmine, the world’s largest holder of Ethereum (ETH), is accelerating its Ethereum staking (deposit) strategy. Attention is focused on whether generating stable returns through staking can help it break through the limitations of the Digital Asset Treasury (DAT) model.

According to Arkham Intelligence, a blockchain data provider, Bitmine has staked a total of 827,008 ETH to date. With the annual percentage yield (APY) of the Composite Ethereum Staking Rate (CESR) currently at 2.86%, Bitmine is estimated to earn staking revenue of about $200,000 per day (about 290 million won) and about $75 million per year (about 110 billion won).

As of this day, more than 1 million ETH is waiting in the Ethereum staking queue, and a large portion of it is likely ETH contributed by Bitmine.

Previously, in November, Tom Lee, chairman of Bitmine, said, "Within the first quarter of this year, we will raise the company’s annual Ethereum staking income to about $374 million through the Made-in-America Validator Network (MAVAN)."

Staking, the core of an Ethereum holding strategy

Bitmine describes its Ethereum accumulation strategy as the 'Alchemy of 5%.' The plan is to secure, over the long term, holdings equivalent to 5% of Ethereum’s total supply. So far, it has succeeded in accumulating 4,143,500 ETH, equivalent to 3.43% of the total.

In particular, the 'staking' strategy—depositing Ethereum to earn interest income—is interpreted as a measure to address the structural vulnerabilities of the DAT model. The aim is to move away from a structure centered on holding highly volatile digital assets and to establish a more stable earnings base.

In fact, after the large-scale liquidation event in the crypto market on Oct. 10, DAT companies’ share prices plunged, prompting the industry to raise questions about the sustainability of DATs. DATs raise funds for digital-asset accumulation through their own equity and bonds. Confidence in the stock effectively translates directly into digital-asset purchasing power. When the share price falls, mNAV (market net asset value ratio, calculated as market capitalization divided by the company’s held digital assets) also declines.

Currently, many DAT companies have an mNAV below 1—meaning their market capitalization is lower than the value of the digital assets they hold. Bitmine is no exception. After announcing its Ethereum accumulation plan, its share price rose as high as $161, but is now down 81.14% from the peak, hovering around $30.36. Its market capitalization accordingly stands at $12.9 billion, lower than the value of its Ethereum holdings (about $13.1 billion).

Kim Min-seung, head of the Korbit Research Center, said, "Ethereum staking yields are in the 3% range per year in terms of the number of ETH, and from an asset-management perspective, 3% annually is by no means a figure that can be ignored," adding, "The staking strategy is meaningful in that it adds about 3% in annual return on top of Ethereum’s own price volatility."

Kim added, "Just as Strategy’s bitcoin accumulation strengthened confidence in bitcoin’s price, Bitmine’s continued accumulation and staking of Ethereum could also act as a factor that increases market confidence in Ethereum."

What impact on Ethereum?

If Bitmine’s case gains market recognition, more companies are expected to stake Ethereum. Unlike other digital assets such as bitcoin, Ethereum can generate additional income through staking, making it a potential differentiating strategy.

An industry official said, "Because Ethereum staking allows the holding itself to translate into income, it is better positioned for the further spread of the DAT model," adding, "Bitmine’s case shows that an Ethereum-based DAT can establish itself as an independent business model."

This is ultimately expected to act as upward pressure on Ethereum’s price. Staking involves depositing digital assets for a certain period so they can be used for network validation, and the deposited amount cannot be traded in the market. As more is staked, the immediately circulating supply available to the market declines. If Ethereum demand is maintained or increases in that context, the price is more likely to rise.

Jinwook, BloombergBit reporter wook9629@bloomingbit.io