BitMine's Tom Lee Says Digital Asset Treasury "Bubble Has Burst" Despite $827M ETH Buying Spree

Tom Lee, chairman of Ethereum treasury company BitMine, said the "bubble has burst" for digital asset treasury companies as many now trade below the value of their cryptocurrency holdings, even as his own firm completed an $827 million Ethereum buying spree last week.

Speaking on Fortune's Crypto Playbook podcast, Lee pointed to widespread trading below net asset value across the sector as evidence the speculative frenzy around DAT companies has already collapsed. Many digital asset treasuries now see their market capitalizations fall short of their underlying crypto holdings' worth.

"If that's not already a bubble burst, how would that bubble burst?" Lee asked on the show.

BitMine purchased 202,037 ETH worth $827 million during last weekend's market crash, when over $19 billion in leveraged positions were liquidated and Bitcoin briefly dropped below $102,000. The aggressive buying brought BitMine's total Ethereum holdings past 3 million tokens, moving the company halfway toward Lee's stated goal of owning 5% of Ethereum's circulating supply.

"Volatility creates deleveraging, and this can cause assets to trade at substantial discounts to fundamentals," Lee said of the purchase timing, in a statement . "We acquired over 200,000 ETH during the downturn."

Lee, who built his reputation as a Bitcoin bull while at Fundstrat research, joined BitMine in June as the company transformed from a Bitcoin mining operation into the world's largest institutional Ethereum holder. The approach mirrors Michael Saylor's Strategy, which has been accumulating massive Bitcoin positions and operating publicly traded vehicles providing crypto exposure.

BitMine now ranks as the second-largest public crypto treasury globally behind Strategy, which holds 640,250 BTC valued at roughly $73 billion. Other Ethereum-focused treasuries including SharpLink and The Ether Machine hold substantially smaller positions of 838,730 ETH and 496,710 ETH respectively.

Lee defended Ethereum's positioning despite the blockchain's struggles with competition from newer networks. He described it as the "blockchain of Wall Street," arguing financial firms exploring stablecoins and tokenized assets will primarily build on Ethereum infrastructure.

"We're essentially a liaison between how Wall Street views future upgrades to Ethereum," Lee told Fortune, positioning BitMine as benefiting from staking rewards and potential inclusion in major stock indexes.

However, Lee's warnings about the broader DAT sector suggest concerns that proliferating treasury vehicles chasing various cryptocurrencies, including altcoins, lack sustainable business models. The sector has expanded rapidly as companies attempt to replicate Strategy's success across different digital assets.

BitMine's share price fell 13.85% over the past 5 days, following a short position by Kerrisdale Capital questioning the sustainability of the treasury model .

Despite volatility, BitMine remains among the most heavily traded U.S. stocks with average five-day volume of $3.5 billion as of October 10, ranking 22nd among all U.S. equities. Combined, BitMine and Strategy account for 88% of global digital asset treasury trading volume.

Lee reiterated his view that Ethereum is entering a "Supercycle" driven by artificial intelligence and financial sector blockchain integration. The thesis underpins BitMine's continued accumulation despite market turbulence and his own warnings about DAT sector challenges.

The contradiction between Lee's bubble warnings and BitMine's aggressive buying reflects the nuanced position that while many DAT companies face valuation challenges, dominant players with scale advantages may survive sector consolidation. Lee appears to be distinguishing BitMine's position from smaller competitors lacking similar Ethereum accumulation or trading volume.

Whether digital asset treasury companies (DATCOs) represent sustainable business models or speculative vehicles remains contested. Critics argue that simply hoarding cryptocurrency adds no fundamental value beyond providing leveraged exposure to volatile assets, while proponents claim benefits from professional custody, staking rewards, and regulatory compliance.