So, Bitmine isn't just about Bitcoin miners anymore. They've jumped on the ETH bandwagon and are now one of the top ETH holders out there. But unlike Saylor, they tend to acquire when ETH is peaking, which means they're kinda late to the game. Saylor bought in when prices were low, so he’s got more room to maneuver, even after selling some Bitcoin recently, according to their SEC filings.
Now, Bitmine is dishing out a tempting 9.5% yield. Sounds great, right? But here's the catch: it only works if they can make some cash, and with the market down, profits from mining could be hard to come by. They might manage it, but that dividend isn't exactly safe.
So, we're looking at a classic high-risk, high-reward situation here.
Given the current market vibes, is this a bad time to jump in? Are any of you ready to take a shot with Bitmine and hope things turn around? Or do most of you think it's better to just sit back and watch for now?
STRC, preferred stock by Strategy is currently under the water because BTC is going down even with higher yield.
I don't know if Bitmine offering yet another preferred stock will even work, I don't think doing this is sustaining at all.
To service the issued shares with guaranteed dividend yields, Michael Saylor actually had to sell Bitcoin from his holdings at a loss. This looks a lot like a Ponzi scheme. My question to Bitmine is: where exactly do they plan to generate the profits to cover the dividends on their own shares?
Strive was the first treasury company to copy Strategy, by offering a dividend paying preferred stock. Now Bitmine is following along because continuing to dilute shareholders of their common stock is no longer working. 9.5% is the starting annual yield and if they are anything like STRC and SATA, they will have to keep raising it to stay at their target price.
Regardless of how they are marketed, there is a lot of risk in these investments. Despite this, there has still been a lot of demand from investors. They are probably thinking they can make good returns before exiting when the runway starts to get shorter. The way ETH is looking, I dont see this being too successful for Bitmine.
It seems Bitmine has not yet given up. They're trying to copy Saylor's ponzi model. The decision to issue dividend preferred stock is showing how they're lacking of money to buy more eth right now. So i won't be surprised if they will be forced to sell their ethereum someday in order to raise cash to pay the
dividend. However, the thing that may be different is that bitmine has passive income from their staking ethereum. So they can use it to pay the dividend.
Nevertheless, I don't see it as an opportunity because it's a high risk instrument. It's pretty much similar to the STRC model owned by Strategy, which is offering 11.5% APY to its STRC holders.
This kind of ponzi much more about gambling by the company itself. Their dividend preferred stock will be strongly driven by the fluctuate of asset hold by the company.
I was thinking that they could have been some kind of break point in price, like Strategy, as I hear the CEO that it might be $7k before they really took a lot of how big their losses already. But not sure about Bitcoin, because my research says that they might be buying at a higher price so it's really going to be very hard for them once ETH doesn't recover in the next bull run.
But let's see, I think they can still get a lot of investors with this kind of offerings. Too good to be true offer, but who knows, everyone is greedy and wanted to profit and Bitmine is a big company too so they precede with their brand name.
To me it absolutely smells of a bailout and stinks like Ponzi. Just another way of suckering in investors and leaving them holding the bag as this 9.5% isn't sustainable. What revenue generation is backing this sort of payout besides the obvious Ponzi, i.e., other investors' money?
The big question need to be answered? where the dividend come from? 9.5% is pretty high and it seems Bitmine is already so deep entrenched into the Ethereum speculation they want to go all in and raise money to offset their mistake of accumulating at peak.
My thought is that, this dividend preferred stock might work wonder if they can get the timing right, buying at the bottom with the raised funds, otherwise it might turn into a disaster.
Omaygattt saylor just take small profit and then he's position just lost billion of dollar. Unrealized. The market is very uncertain nowadays and in my opinion this one have a bold moves.
bu there is different. While Michael Saylor has a massive multi-billion dollar buffer because he bought Bitcoin at much lower historic entries, Bitmine built their 5.42 million ETH treasury near peak prices, leaving them bleeding through nearly $9 billion in paper losses. Their recent liquidation of almost all their Bitcoin down to just 203 BTC proves they are actively feeling the cash-flow squeeze.
For Bitmine, it's simple. They currently stake a huge sum of their existing ETH holdings and last I checked, they are projected to get around $250m or more annually from staking rewards. I don't know if it would be the same amount now that their the value of ETH has plummeted but should still be good amount. People are so speculating that the yield for preferred stock will come from here but I think it would mean that they would f**k their common stock holders once again because those gets nothing despite providing the capital that was used to generate the yield.
Nah, it's just another Ponzi in the making similar to the STRC. Bitmine is in big floating lose. They have only 440m cash in their reserve. So it's impossible for them to absorbing more ethereum from the market without sucking more money from retail who can be fooled by using their yield-backed stock.
Bitmine is receiving averagely 3% from their ethereum beacon staking. So it makes no sense when they offered 9.5% APY for their yield-backed stock. Hopefully, people won't be fall in this trap.