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While the market was guessing which of the major corporate crypto whales would be the first forced to sell reserves to cover obligations, BitMine and Strategy (MSTR) responded with synchronized but opposite moves.
According to fresh treasury reporting, BitMine absorbed another 111,942 ETH from the market despite a billion-dollar paper loss, while Strategy directed free cash toward an early buyback of its 2029 bonds at a discount, fully preserving its Bitcoin stack but not adding a single coin on top.
A tale of two treasuries
Strategy threw about $1.38 billion in cash at eliminating the threat from its riskiest convertible debt. That is about two-thirds of the company's entire cash buffer, used to buy back bonds with a face value of $1.5 billion at a discount of about 8% to par.
Since the conversion strike price was $672, far above the current market, these bonds would not have turned into shares anyway, but they still continued to weigh on the balance sheet. As a result, Strategy's total convertible debt dropped at once from $8.2 billion to $6.7 billion.
What matters in principle is that the company's Bitcoins remain untouched and Strategy still holds 843,738 BTC on its balance sheet at an average purchase price of $75,699 per coin. The market is assessing this financial diet positively and with a market capitalization of $56.5 billion, the premium to NAV (MNAV EV) remains at a healthy 1.20x.
While Strategy is reducing leverage, BitMine's treasury is playing at full power, using Ethereum's drop below $2,200. In just one week, the company increased its total stack to 5,390,404 ETH and now controls almost 4.47% of the entire circulating supply of the second-largest cryptocurrency with 4.71 million ETH already generating yield in staking.
The right to control such a share of the network comes with large paper losses as right now, BitMine's unrealized loss on its ETH position is estimated in the range of $7.35 billion to $8 billion. However, the company is counting on passive income and a V-shaped recovery of the ETH price under its "Alchemy of 5%" strategy by the end of the year.
So, instead of panic selling, the market received two alternative scenarios. Strategy sacrificed liquidity to protect its Bitcoin balance sheet from debt pressure, while BitMine consciously took on maximum volatility risk to monopolize its share in Ethereum.
Dan Burgin
