This Ethereum Treasury Company Is Close to Owning 5% of All ETH in Circulation. Does That Make It a Buy?

BitMine Immersion Technologies (NYSE: BMNR) is the largest Ethereum (CRYPTO: ETH) treasury company in the world, and it's not even close. After massive buys over the past 30 days, BitMine now owns 4.88% of all Ethereum in circulation. By the end of the year, the company plans to push through the 5% ownership mark.

Admittedly, the company's relentless buying of Ethereum over the past year has been impressive. But I'm still not convinced investors should be pouring their money into digital asset treasury companies. Here's why.

Where is the payoff for investors?

BitMine can be an interesting proxy stock if you're looking for exposure to Ethereum and can't buy ETH directly. After all, the primary goal of BitMine is to buy and hoard as much Ethereum as it can, as fast as it can. So think of an investment in BitMine as a roundabout way to dollar-cost average into ETH.

Image source: Getty Images.

But where's the payoff for investors? The market cap of BitMine is $14.5 billion, while the value of its Ethereum holdings is now $14.4 billion. In other words, investors are only getting rewarded with a tiny premium for holding BitMine.

From my perspective, that's just not enough of a premium to justify buying it. Just look at BitMine's stock market performance. It's down 54% over the past 12 months. That's largely due to Ethereum's woeful performance, which is down 51% from its all-time high in August 2025.

The reality is that BitMine can't trade higher unless Ethereum does. It simply has no other way to generate economic value for investors.

Why not just buy Ethereum?

In a bull market, it might make sense to invest in digital asset treasury companies loading up on a specific cryptocurrency. But crypto is not in a bull market. Ethereum may have had a nice run over the summer, but it's still well off its all-time highs, and the crypto market is still very much in recovery mode.

Moreover, there are now spot Ethereum ETFs that offer 1:1 exposure to Ethereum's price. These are remarkably easy to buy and hold, with very low management expenses. There's simply no reason not to buy these if you're looking for low-cost exposure to Ethereum.

Even better, why not just buy Ethereum directly on a cryptocurrency exchange? That way, you get full access to the advantages of holding crypto directly, such as being able to stake it for passive income.

At the end of the day, the business model of digital asset treasury companies appears broken. It only works in a bull market but breaks down if the market trades sideways or declines.

Just look at the Ethereum treasury companies that have already given up on ETH and are now moving in different directions. In February, for example, ETHZilla rebranded itself as Forum Markets and pivoted into real-world asset (RWA) tokenization.

That's not to say Ethereum isn't a good long-term investment. But if you believe in Ethereum's long-term growth story, just buy it directly.

Dominic Basulto has positions in Ethereum. The Motley Fool has positions in and recommends Ethereum. The Motley Fool has a disclosure policy.