Ethereum has tackled this issue by embracing Layer-2 solutions, establishing a network aimed at maintaining throughput, minimizing fees, and scaling transaction volume while avoiding ongoing network congestion. Scalability stands as a fundamental pillar for the mainstream adoption of ETH. However, that pillar now seems to be facing significant pressure. A prominent analyst reports that Ethereum’s revenue has experienced a significant decline this year, plummeting from $2.52 billion at the beginning of the year to approximately $604 million. The chart indicates that Base’s 365-day Cumulative Revenue reached approximately $83 million, with only around 8% of that amount being returned to Ethereum in the form of settlement fees. That amounts to approximately $6.7 million, playing a role in the decline of ETH’s revenue.
This revenue-leakage pattern is notably consistent across the majority of L2s. Arbitrum, Optimism, and Polygon, for example, each hold a comparable portion of value, which steadily diminishes Ethereum’s direct fee capture as time progresses. In straightforward terms, diminished revenue capture indicates a decline in ETH activity. In that context, what is BitMine aiming to achieve? Does this indicate that its treasury accumulation leans more towards speculation rather than being fundamentally driven?
BMNR’s portfolio is notably weighted towards Ethereum, with a substantial holding of 3.66 million ETH. In a notable development, a wallet associated with BitMine has amassed 38,596 ETH within a mere two-day span, a significant accumulation that could have been anticipated to influence market dynamics. However, the effect was limited, as the coin remained constrained beneath the $3,200 mark. The impact on BMNR was significantly more evident. On the daily chart, the token finished 9.17% lower, exacerbating the quarterly losses. Currently experiencing a 32% decline, Q4 is on track to become BMNR’s most challenging quarter since Q3 2022.
Additionally, the lackluster on-chain fundamentals, particularly with underperforming Layer 2 solutions, indicate that there are insufficient transactions generating fees to mitigate supply. Ethereum remains in a net inflationary state, which continues to keep upward price pressure subdued. In this context, BMNR’s ETH accumulation appears to be less of a strategic position and more of a speculative maneuver. If this trend persists, BMNR’s mNAV may decline further, underscoring the risks associated with its significant Ethereum exposure.