Bitmine Immersion Technologies, a treasury company focused on the Ethereum cryptocurrency Ether (ETH), is going through a tricky time in the market.
The company, led by Tom Lee, currently holds more than 4 million ETH, worth about $12 billion, and has total assets of $13.2 billion, including $1 billion in cash.
Despite this support, The company’s stock is trading below its net asset value (mNAV)reflects the gap between the market price and the real value of the asset.
As explained by CriptoNoticias, mNAV measures whether a company’s total market value is greater or less than the value of its ETH reserves (or assets that a company has accumulated in its treasury).
If the indicator is less than 1, it means the market is valuing the company below the value of its ETH reserves. this can be seen A buying opportunity for some investorsothers interpret it as a sign of uncertainty.
Financial market analyst Pau Galindo Ortigosa said the fact that mNAV is less than 1 signals a risk, noting that “sustained financial pressures could force the company to liquidate part of its ETH reserves in order to meet its obligations.”
In other words, this situation could force the company to sell a large amount of ETH, increasing the supply to the market and causing the price of the cryptocurrency to fall.
Another risk is that confidence in ETH could be undermined and its role as a corporate treasury reserve asset could be called into question. This is what we saw recently with Strategy, the company with the largest Bitcoin (BTC) reserves.
The company, led by Michelle Saylor, faced market turmoil as doubts arose about its ability to maintain its holdings and meet its financial commitments.
This results in Bitcoin price volatility and concerns Other companies with less support may also be forced to sell some of their reserves.
A similar scenario could happen with ETH if a large treasury such as Bitmine, which holds more than 3% of the asset’s total supply, faces financial pressure or is forced to sell some of its reserves.