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Tom Lee Shrugs Off ETH Sell-Off, Says Fundamentals Don’t Match Falling Prices

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Tom Lee Shrugs Off ETH Sell-Off, Says Fundamentals Don't Match Falling Prices


BitMine added 41,788 ETH last week as Tom Lee called the pullback attractive amid growing on-chain activity.

Ethereum’s (ETH) price plunged over the weekend, sliding from around $2,900 to near $2,100 as selling pressure intensified. It has since stabilized slightly as of Tuesday, but remains down more than 26% over the past month.

Despite weakening investor confidence, Fundstrat head of research Tom Lee attributed the crypto asset’s weakness to the absence of leverage and gold’s rally rather than deteriorating Ethereum fundamentals.

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Aggressive Buying Spree

Leading Ethereum treasury firm BitMine has continued to accumulate ETH during the recent price pullback. Lee, who is also its Chairman, described current levels as “attractive” amidst what he considers as strengthening network fundamentals.

Lee said,

“BitMine has been steadily buying Ethereum, as we view this pullback as attractive, given the strengthening fundamentals. In our view, the price of ETH is not reflective of the high utility of ETH and its role as the future of finance.”

The sharp decline in the crypto asset’s price over the past month comes even as Ethereum daily transactions reached an all-time high of 2.5 million and active addresses climbed to a record 1 million per day in 2026. Lee compared this to earlier crypto downturns, when on-chain activity declined, and said recent price weakness appears driven by non-fundamental factors, including subdued leverage and a surge in precious metals prices.

His comments followed reports estimating that the company was sitting on over $6.9 billion in unrealized losses on its Ethereum holdings.

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No Pressure To Sell ETH

As of February 2, the company reported total crypto and investment assets of $10.7 billion, including 4,285,125 ETH, 193 Bitcoin, a $200 million stake in Beast Industries associated with MrBeast, a $19 million stake in Eightco Holdings, and $586 million in cash.

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According to the company, its balance sheet comprises approximately $10.1 billion in crypto and investments, with its Ethereum holdings generating staking rewards at a Composite Ethereum Staking Rate of 2.81%, while cash earns money market yields of roughly 3.5% to 3.9%.

BitMine reported no outstanding debt. Lee said this structure allows the firm to withstand crypto market volatility while generating recurring income. He also added that there is no pressure to sell ETH given the absence of debt covenants or related restrictions. As of February 1st, BitMine had staked 2,897,459 ETH, which is worth around $6.7 billion. This is an increase of 888,192 ETH over the past week and represents a portion of its total Ethereum holdings.

Staked ETH has risen steadily from 408,627 ETH at the end of December 2024. BitMine said that it is currently working with three staking providers as it prepares to launch its commercial MAVAN validator network in 2026. As per Lee’s update, over the most recent week, the company acquired 41,788 ETH, continuing a pattern of weekly purchases that has included sizable additions throughout January.

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Pumpfun Unveils Investment Arm and $3 Million Hackathon

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Pumpfun Unveils Investment Arm and $3 Million Hackathon


PUMP rallied as much as 10% but erased its gains as crypto markets dipped.

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Spot Bitcoin ETF AUM Hits Lowest Level Since April 2025

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Spot Bitcoin ETF AUM Hits Lowest Level Since April 2025

Assets in spot Bitcoin (BTC) ETFs slipped below $100 billion on Tuesday following a fresh $272 million in outflows.

According to data from SoSoValue, the move marked the first time spot Bitcoin ETF assets under management have fallen below that level since April 2025, after peaking at about $168 billion in October

The drop came amid a broader crypto market sell-off, with Bitcoin sliding below $74,000 on Tuesday. The global cryptocurrency market capitalization fell from $3.11 trillion to $2.64 trillion over the past week, according to CoinGecko.

Altcoin funds secure modest inflows

The latest outflows from spot Bitcoin ETFs followed a brief rebound in flows on Monday, when the products attracted $562 million in net inflows.

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Still, Bitcoin funds resumed losses on Tuesday, pushing year-to-date outflows to almost $1.3 billion, coming in line with ongoing market volatility.

Spot Bitcoin ETF flows since Jan. 26, 2026. Source: SoSoValue

By contrast, ETFs tracking altcoins such as Ether (ETH), XRP (XRP) and Solana (SOL) recorded modest inflows of $14 million, $19.6 million and $1.2 million, respectively.

Is institutional adoption moving beyond ETFs?

The ongoing sell-off in Bitcoin ETFs comes as BTC trades below the ETF creation cost basis of $84,000, suggesting new ETF shares are being issued at a loss and placing pressure on fund flows.

Market observers say that the slump is unlikely to trigger further mass sell-offs in ETFs.

“My guess is vast majority of assets in spot BTC ETFs stay put regardless,” ETF analyst Nate Geraci wrote on X on Monday.

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Source: Nate Geraci

Thomas Restout, CEO of institutional liquidity provider B2C2, echoed the sentiment, noting that institutional ETF investors are generally resilient. Still, he hinted that a shift toward onchain trading may be underway.

Related: VistaShares launches Treasury ETF with options-based Bitcoin exposure

“The benefit of institutions coming in and buying ETFs is they’re far more resilient. They will sit on their views and positions for longer,” Restout said in a Rulematch Spot On podcast on Monday.

“I think the next level of transformation is institutions actually trading crypto, rather than just using securitized ETFs. We’re expecting the next wave of institutions to be the ones trading the underlying assets directly,” he noted.