Analysts at 10x Research warn of significant risks for companies that accumulate digital assets (DAT) due to BlackRock’s entry into the Ethereum staking ETF market. This move could fundamentally alter the distribution of investment capital in the corporate cryptocurrency ownership segment.
This is reported by Finway
Impact of BlackRock’s Staking ETF on the Ethereum Market
Recently, BlackRock registered a new Ethereum-based ETF with staking in Delaware. If this fund receives approval, investors will be able to earn income from staking thanks to low and transparent costs. Experts emphasize that such financial instruments create competition for DAT companies that rely on a premium to net asset value (NAV).
“BlackRock’s application for Ethereum staking in an ETF that offers a low-cost source of income is likely to put the DAT economy under increased scrutiny.”
According to analysts, BlackRock’s ETF fee will be only 0.25%, while the hidden costs of DAT models are significantly higher. This makes the ETF more attractive to investors and creates pressure on traditional corporate strategies for accumulating crypto assets.
Financial Condition of BitMine and Market Prospects
BitMine Immersion Technologies, the largest corporate owner of Ethereum, acquired assets at an average price of $4051 per 1 ETH. Currently, the company is recording over $1000 in losses on each coin, amounting to approximately $3.7 billion in unrealized losses, with a total volume of 3.56 million ETH (2.94% of the entire Ethereum supply). BitMine’s mNAV has fallen to 0.77 (basic) and 0.92 (diluted), complicating the attraction of new capital through stock issuance.
The decline in net asset value (NAV) makes further business expansion impossible and creates a so-called “investor trap.” Marcus Tielen, founder of 10x Research, points out that investors in DAT structures are left with no option to exit without significant losses if the premium shrinks to zero.
“When the premium inevitably shrinks to zero, as is happening now, investors find themselves trapped in the structure, unable to exit without substantial losses — a true Hotel California scenario.”
Tielen adds that unlike ETFs, DAT companies often employ complex and opaque fee structures that gradually erode investor profits over time. According to his estimates, the company Strategy has already lost about $20 billion in NAV since it began acquiring bitcoins, especially after unsuccessful purchases at the end of 2024.
Previously, analysts from several research firms lowered their target prices for Strategy’s stock, noting that to achieve the company’s financial goals, the price of bitcoin must rise to $150,000 by the end of the year. BitMine is estimated to be in a similar situation with Ethereum, but without the premium that public investors overpaid.
DAT models depend on a premium to net asset value, and when this premium disappears, opportunities for attracting new capital become limited. In contrast, ETFs trade almost at NAV, remaining more stable for investors during periods of volatility. Analysts predict that in the event of further market declines, investors will increasingly shift from complex DAT structures to simple and inexpensive ETFs.
It is worth noting that competitors have already emerged in the market, also seeking to capture their share of the Ethereum staking ETF segment.