In today’s crypto news, gold advocate and longtime crypto critic Peter Schiff has taken aim at Tom Lee’s latest Ethereum strategy. In a recent X post, Schiff criticized Bitmine Immersion Technologies’ plan to raise $300 million through a preferred share offering. He argued that the company is borrowing a page from Michael Saylor’s playbook at the worst possible time.
Peter Schiff Calls It “Saylor’s Playbook”
Schiff’s criticism centered on Bitmine’s newly announced preferred share offering. Under the plan, Bitmine intends to issue $300 million worth of preferred shares carrying a fixed 9.5% annual dividend. The company plans to use the proceeds to expand its Ethereum treasury and support broader corporate operations.
Reacting on X, Schiff noted the scheme’s similarities to Michael Saylor and Strategy’s financing model. Meanwhile, Strategy’s preferred shares currently offer yields above 12%. Additionally, Ethereum is struggling under heavy selling pressure. As a result, Schiff questions whether investors would find Bitmine’s proposed offering attractive in current market conditions.
Additionally, Strategy is currently sitting on over $10.33 billion in unrealized losses after Bitcoin’s collapse to $63,460 today. Bitmine itself currently sits on over $9.62 billion in unrealized losses on its ETH holdings as the asset trades at $1,780. The losses have cast doubt on the wisdom of public companies raising capital to buy increasingly volatile digital assets.
The situation became even more controversial after Strategy recently disclosed a Bitcoin sale. That development shocked market watchers who viewed the company as a perpetual buyer regardless of market conditions. Hence, for Schiff, Bitmine’s latest fundraising effort represents another example of what he sees as a risky treasury strategy.
Bitmine Continues Betting Big on Ethereum
Despite the criticism, Bitmine has not slowed down its Ethereum accumulation. The company bought another 25,000 ETH worth approximately $47.98 million from BitGo earlier this week. That purchase pushed Bitmine’s Ethereum holdings above 5.4 million ETH, more than 4% of Ethereum’s circulating supply.
Tom Lee has repeatedly stated that Bitmine’s long-term objective is to accumulate approximately 5% of Ethereum’s total supply. He firmly believes in Ethereum’s importance as an infrastructure provider in today’s evolving financial landscape. Thus, rather than treating Ethereum’s weakness as a reason to reduce exposure, Bitmine is treating it as an opportunity to accumulate additional ETH at lower prices.
Why Supporters Think Bitmine’s Strategy Is Different
While Schiff views the offering as a replay of Strategy’s Bitcoin model, there is one major difference. Ethereum generates income. Unlike Bitcoin, Ethereum holders can stake their assets and earn recurring rewards. According to recent reports, the company has staked more than 5.08 million ETH worth roughly $9.5 billion. That represents approximately 94% of its total holdings.
Those staked assets generate roughly $300 million in annual rewards. Meanwhile, Bitmine’s proposed preferred shares would require annual dividend payments of approximately $28.5 million. That means staking rewards alone could theoretically cover the dividend obligation more than ten times over. The firm would still have substantial capital to buy more ETH.
Thanks to this passive cash flow, Bitmine may not need to sell Ethereum to meet dividend obligations. Thus, Bitmine’s financing model could be more sustainable than Strategy’s, which depends entirely on BTC appreciation.
Temitope Olajide
