BitMine Immersion (BMNR) shares soared more than 500% on Monday after the crypto mining firm named Fundstrat’s head of research Tom Lee its new chairman of the board.
More importantly, the Los Angeles-headquartered company announced plans to raise about $250 million through a private placement, proceeds from which, it confirmed, will be used to buy Ethereum (ETHUSD).
Today’s rally has inflated BMNR’s market cap to well over $150 million.
Under Tom Lee as chairman, BitMine plans on using Ether as its primary treasury reserve asset.
According to the market veteran, ETH stands to benefit rather significantly now that the U.S. Senate has approved the much-anticipated “Genius Act.”
The legislation clears the path for stablecoins to traverse further into mainstream adoption, which could benefit the world’s second-largest crypto since “Ethereum is the blockchain where the majority of stablecoin payments are transacted,” Lee said in a statement today.
Moving forward, the mining company will use ETH held per share as a key performance metric, he added. In short, Lee aims at transforming BitMine Immersion shares into the “MicroStrategy of Ethereum.”
Tom Lee has picked Ethereum as the future reserve asset for BMNR since he remains bullish on what the future holds for the cryptocurrency.
According to his forecast from late 2024, ETH should hit $5,000 by the end of this year, indicating potential for a 100% rally over the next six months.
However, in the near term, it’s reasonable to question whether BitMine Immersion stock will be able to sustain its gains accumulated this morning.
Investors should learn from the example of SharpLink (SBET) as well, which announced a similar Ether strategy last month, resulting in an explosive initial rally that all but faded just as quickly in the subsequent sessions.
Caution is warranted in chasing the cosmic run in BMNR shares today also because no Wall Street analysts tracked by Barchart currently cover this BTC mining firm, indicating it’s not on the radar for institutional investors – at least for now.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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