Bitmine Immersion Technologies, Inc. (BMNR) Earnings Call Transcript & Summary

And now please welcome Bitmine Chairman of the Board of Directors, Tom Lee.

Well, welcome, everyone. That was quite an introductory video. And it's my first time seeing it because Marcy wanted to make it a surprise. I've got a presentation but before I dive into it, I just want to make some sort of opening comments, especially because those on the live stream are just hearing us begin this. So first, I do want to recognize the folks that organized and put this shareholder meet together in Las Vegas. So that's Marcy Simon of Agent of Change and her team over there. At the end of this sort of programming content, Marcy will come on stage and explain some of the other fun things that are going to follow the formal presentation of some of the content. I do want to recognize several constituents that are behind Bitmine. So I'm going to start with the Board of Directors, which if you can all just stand up at once, if you don't mind, there's going to be 7 standing up. Okay. Great. Board of Directors. And I'd like to recognize those from Bitmine's executive management team. So everyone who is from Bitmine, please just stand up. Great. I'd also like to recognize some key partners for us. One of them is MOZAYYX capital. And if there's folks from MOZAYYX here, if you could stand up, I believe there should be a couple. I see some hands waving in the back. Okay. Of course, our outside counsel, Mike Blankenship and the team from Winston & Strawn, they've been critical, critical partners as we forge as a crypto treasury. So Mike and -- Mike was up here with me earlier, but where is Mike and team. They're back there. And I recognize a couple of original PIPE investors here. Seth and others. So if you are part of the original PIPE, could you please stand? I see Adam here. Please stand up. These guys helped us fund the initial transformation of Bitmine. I believe I see Ash from the Ethereum Foundation here. So Ash, could you please stand up? Ash is from the Ethereum Foundation. Okay. And then, of course, I'm not going to ask all the stockholders to stand up, but I do want to recognize you guys because, one, I appreciate you making the journey out here. It's the first ever shareholders meeting we have. We tried to make this a fun event for you, and we have some content for you to learn. But it really means a lot to us because we're here to serve the shareholders and really do right by the stock. Okay. So let me just click forward on this presentation. Okay. So I put together a presentation for our annual stockholder meeting. And here's some disclaimers. Again, just like the proxy statement, I hope you read it, line to line. But here's the agenda. I want to give you a recap of 2025, which was the year that we transformed Bitmine. I want to give you an update on progress about the Alchemy 5% and what it could mean. I do want to spend a lot of time talking about the 4 pillars of growth to drive stockholder value. And this is going to apply to 2026 and beyond. Then I want to go back to why Ethereum is the future of finance. And of course, we've got the team in place to drive transformation. Okay. I think it's a year we need to recap 2025 because the year was where a lot of digital asset treasuries came on to the scene, by our count over 80. But in that 12-month period, by the end of last year, we have now seen the emergence of what I would call dominant DATs. Okay. First, just a reminder, I want you to think about holding periods. At Fundstrat, we first wrote about Bitcoin in 2017 and let's look at how Bitcoin has -- and at that time, we said you'd want to own 1% of Bitcoin and let's see how it did compared to other assets. And a lot of these other assets, I would still own. But as you can see, Bitcoin, in that time period that's passed has gone from $960 through September 26, which we just want to record before the liquidation event, $109,000. That's 112x return. It outperformed NVIDIA which went from $2 to $178, which is massive already, 65x, it beat NASDAQ, it beat Gold, which went from $1,100 to $3,800 and it beat the S&P, which went from $2,200 to $6,600. So if you put 1% into Bitcoin, that was a good insurance debt because it really crushed everything else. But Ethereum did even better. You can see Ethereum went from $8 to $3,900, that's almost a 490x return. Okay. But last year, crypto kind of disappointed. You can see Gold did great. The MAG 7 did well. NASDAQ did well, S&P did well. And you could see Bitcoin and Ethereum actually were down for the year. So in some ways, it made many people wonder, is the crypto winter started or was even last year, crypto winter. Keep in mind that crypto was doing great until October 10 of last year. So Ethereum was up 40% and Bitcoin was up 33%. But then we had the crypto mass liquidation event. $1 trillion of value was wiped out. As many of you know, it was the largest deleveraging event in the history of crypto, even bigger than what happened with FTX. And they estimate over 2 million crypto accounts were wiped out, went to 0. And many market makers and even crypto exchanges had their balance sheets hurt. So the industry since October 10 has been limping along. In 2022, November 2022, when FTX collapsed, it took 8 weeks before the market began to show signs of life. So if you asked us this year, it's a larger event, but when would crypto begin to maybe find its bottom, it would be December 10. And post October 10, as you can see, Ethereum fell basically by half and Bitcoin fell by 36%. So here we are. But if you kind of squint, you can see since just the late December, Bitcoin and Ethereum had begun to claw their way back, okay. Now think about that. It was the largest liquidation event in the history of the crypto industry. So crypto treasuries were built to go public and outperform ETFs by buying crypto. And since October 31, only 2 crypto companies bought any crypto in size. MicroStrategy from December 31 to the end of the year, about $2.9 billion worth of Bitcoin, which is a lot. MetaPlanet bought $330 million of Bitcoin. And among the Ethereum treasuries, only 1 Crypto treasury bought any Ethereum, which was Bitmine, which bought $2.4 billion worth of Ethereum. And in fact, 2 Ethereum treasuries actually sold Ethereum. So if you think about accretion by buying ETH accretively or buying Bitcoin accretively, it's only 2 companies. Now let's think about other dimensions about Ethereum treasury dominance. One is just the size of the balance sheet, dollar value of Ethereum held. These numbers, of course, are a little stale, but Bitmine is around $13 billion. And that is basically 5x larger than the next largest Ethereum treasury. But the lifeblood of a crypto treasury is trading volume. Bitmine trades $1.6 billion a day. And as you know, we published weekly stats, but routinely, Bitmine is a top 50 most traded stock in America, top 50. And as you can see, that's 14x larger than #2 in crypto treasury. So if you're looking at what institutions want, institutions want a really liquid stock that they can buy without disturbing the price, well, we trade $1.6 billion a day. So they can buy $1 billion in a day. But the next smallest crypto ETH treasury only trades $100 million save. It would be very hard for them to put $1 billion to work. So again, that's the comparative dominance. And so my takeaway is in 2025 because of October 10, it has shown who are the dominant crypto treasuries. And really, in my mind, is 2, MicroStrategy and Bitmine. And between the 2 of us, it's 90% of all crypto trading volume for DATs. So the other 78 companies represent 10% of the volume. Okay. So let's jump to Part 2, which is the company has made rapid progress on getting to 5% of Ethereum. So that was our mission statement on June 30, when we launched the Ethereum treasury funded by our PIPE investors, 2 of which are here today. And in those ensuing 6, 7 months, as you can see, we wanted to get to 6 million ETH tokens. And in 6 months, we're at 4.2 million ETH. So we're 68% of the way to 5%. We originally thought this would take 5 years, but we're 68% of the way there in 7 months. Now we have cash, $1 billion of cash on the balance sheet. So if we add the cash instead, let's buy Ethereum with the cash, we would have 4.5 million ETH tokens, which means we're 75% of the way to the Alchemy of 5%. So we believe if you believe this trajectory, Bitmine should cross 5% sometime this year, assuming the 7 months continue to hold. And as you can see, we studied the blue chip standard for Crypto Treasury, which is MicroStrategy. And as you can see here, we have $13 billion of ETH, including cash in roughly 7 months. At the same point, MicroStrategy had $3.4 billion of Bitcoin. In fact, we accumulate as much Ethereum as Strategy accumulated which took them roughly 1,300 days or 4 years. Okay. So now that we've stacked some ETH. I think you need to think -- because many of you might get angry at us because I've seen it on Twitter, like Tom, if you cut ETH and don't do anything else. You're just going to stake it, okay? But then I think you're misunderstanding what happens if you have a substantial stake. And especially as a validator and a proof-of-stake network, in one of the most important blockchains in the world today. I mean, Ethereum, in our view, is going to be the future of finance. So we have 5%. Imagine like someone saying, hey, there's this really tall kid, okay. He's like 7 feet tall, so we're just going to have them clean gutters, because he's so tall. Like your best use, best return should be like, oh, he should be a basketball players or something, right, not a roof cleaner. Okay. So that's what I'm saying. You have to imagine, if you own 5% of Ethereum and it's the most important blockchain in the world, and it's going to be the future of finance, and it will be the settlement layer for almost everything else. I don't know if you'd want us to just be staking ETH and then that's it. And like -- but that's what a lot of people on -- many of you might even think that's what you want. But let me just try to open your imagination to some things that would make sense. First, when we made our first presentation about Bitmine, we gave you this road map. We said we're going to have a made in America validator network. We're going to be a community participant, especially with the Ethereum Foundation and Ash, who was one of the key folks there. We also wanted to do moonshots, okay? These are select investments and ideas that would really enhance the future value of Ethereum. And of course, we want to get to 5% of ETH. So I want to focus on this moonshot. And at the time we wrote this in our first presentation from July, we said we would use up to 5% of the balance sheet to do moonshots. Now 5% today is $700 million. So you should realize we've been giving you this idea that we would take 5% of the balance sheet, $700 million, and our balance sheet will grow, but we want to do moonshots that will strengthen Ethereum's competitive position. So today, we announced one of the moonshots, okay? You might be confused. So I'll explain to you why, this is not confusing, okay? We made a $200 million investment into Beast Industries. I would say if someone said, what are you expecting to accomplish? If this was just like, hey, I'm going to make a $200 million bet in to Beast, no-brainer, okay? Because he is -- I'm going to skip around. I'm going to jump because he is the iconic content creator of our generation. There is nobody more important to Gen Z, Gen Alpha and millennials. Now I'm looking at the room, okay, I'm going to guess, okay, that the representative population of Gen Z, Gen alpha is not here, okay? Because otherwise, you guys would be using a lot of slang, I don't understand. I see some millennials, but I've seen a lot of Gen X and a lot of baby boomers, okay? So the thing is, is that you might think that we have gone off the rails. But that's not the thing, okay? Mr. Beast is the #1 content creator of the world. And if you're not following how important he is, first of all, he has 1 billion followers, okay? 1 billion like -- 7 billion people on this planet. He has 1 in 7 people following him. But I'm going to say, I only think there's 3 million people with like Internet accounts. He has like 1/3 of all people that are on the Internet following him. That's reach. For instance, he has the only person with more followers that our celebrities is Ronaldo, Cristiano Ronaldo, okay? And of all the creators, he's a 1 billion. The next is -- I can't really read the name, I need my magnifiers, okay? 300 million. He is a giant among content creators. In fact, nobody is going to be able to become Mr. Beast again. I would say it's almost impossible for someone to -- in the next 10 years to get 1 billion followers, and he's created this organically. In fact, if you look at YouTube usage, Mr. Beast has more viewership than Walt Disney or Netflix or NBC or Paramount, Fox, Warner Bros or Amazon. Nobody is more watched in streaming world than Mr. Beast, okay? And think about that for a minute. And the Super Bowl, which is like considered the global event gets 256 million views on that event. Every twice a month, Mr. Beast puts out a video and each one gets 252 million views. His content is more watched than the Super Bowl, okay? So he has 535 million views a month, out of his 1 billion followers. They are super engaged. And now he does all these collaborations, that's the key word, okay? He collaborates with all these people that you might care about somewhere on this grid, okay? But he does content with them. And guess what -- well, actually, let me just jump forward. Well, yes, let me back up then. Okay. So that's where it comes with us. So again, I'm going to start with what I just said. So if it was just a $200 million investment, guys, this is a no-brainer. This guy is the most important content creator in the world. And Bitmine was invited to invest in their capital structure. Look at who else is allowed to invest, Social Capital, which is Chamath, Alpha Wave, Mr. Beast himself, he owns 51% of the company. We're the largest corporate and strategic investor in his company. So we are big. What do I think that investment is worth? Okay, I can make a forward statement because I'm not Beast Industries, but I think we're going to easily make a moonshot return on that 10x. But that's not the reason, okay? So he's the #1 content creator. And now we have substantial call option value on any future consumer service developed by each, okay? Now I want to read what Jeff Housenbold, their CEO actually stated. Sorry, I'm going to have to pull this up on my phone, about this investment that we made. And I want you to lose some carefully to his words, okay? What he said was, we are excited to welcome Tom Lee and Bitmine as new investors and Beast Industries join our current top-tier venture investors, and we're not a venture investor. We're a strategic corporate. Their support is a strong validation of our vision, strategy and growth trajectory, and it provides additional capital to achieve our goal to become the most impactful entertainment brand in the world, okay? So we're helping them get to their goal. We look forward to exploring ways to further collaborate, see, that's the word and incorporate DeFi into our upcoming financial services platform. So think about this. If you want Ethereum to be part of the future of finance, it kind of makes sense to have a connection to the most important content creator in the world, okay? So again, if you were angry and you downvoted our investment in Mr. Beast, you're allowed to change your downvote, okay. So I just want to explain the potential synergies. So you have -- okay. Someone says the #1 investor for retail investors, okay, me, the #1 holder of Ethereum in the world, okay? We own more Ethereum than anybody, and it's the future of finance. Plus the #1 content creator in the world. I mean, guys, that's the option value. I mean that's the moonshot potential. And that's what we just put Bitmine on a trajectory for another moonshot beyond just the money we earn from staking, okay? Now lastly, if you want to know where we could have potential collaborations. I'll give you some thoughts. For instance, do any of you guys watch Beast games? Okay, like it's huge. It's the #1 show in 80 countries. #1 show in 80 countries. 144 million people watched it in the first 25 days. It's the #1 script -- unscripted show in Prime Video history. 50 million families watched in the first 25 days. I mean this is driving Amazon growth, and it broke 67 world records. Well, would it make sense for Bitmine to be a sponsor partner with Mr. Beast in one of the episodes, right? It makes perfect sense. Well, that's what we're going to have synergy from by being their largest corporate strategic investor. And by the way, something that the MOZAYYX partners and I met from there here and Xuan is missing. But one of the things that was super compelling to us is that the corporate values of Beast Industries. If you're not aware, they are a very philanthropic group. Mr. Beast himself is extremely charitable. These philanthropy has grown to one of the biggest giving engines in the world, okay? They've raised hundreds of millions of dollars for things like refugees, food, prosthetics, surgeries, it's incredible. So we have corporate values aligned again with what I think is the most important content creator in the world. So hopefully, and I took a lot of time to explain that you understand this was a smart move, okay? We're not doing something crazy with shareholder capital. And they're growing, by the way. Look at -- his follower count is up 30% year-over-year. I mean, pretty soon, his follower counts can include like Mars inhabitants because he's going to cover the whole planet, right, after $7 billion? Or it will be like frozen eggs and stuff and 41% growth of views. Okay. So that takes us back to our strategy going forward. We have 4 pillars of growth because, again, I don't think as shareholders, you want us to just simply be staking ETH and buying ETH, especially as we get close to 5%. So let me explain to you our 4 pillars of growth. The first is to maximize yield on Ethereum. Okay? So we're going to optimize the staking yield. The CESR benchmark is 2.8. We're going to try to do better. One way we do it, at least, one way that we've talked about it is to pursue alpha strategies. Now the entity that will execute this for us is MOZAYYX Capital. But we also have an adviser, Tom DeMark, of DeMARK Analytics. For those who are boomers or older Gen X, Tom DeMark is iconic. He is one of the most famous market timing people. He has won so many awards. He only has 2 clients. I believe he has disclosed this -- well, I don't think he's disclosed his first client, so I'm not going to name it. We are his only other client and I showed you that slide where we bought $2.4 billion of ETH in the last 2 months. Tom DeMark's strategies, along with MOZAYYX execution probably saved us $400 million on those purchases. So think about that. We bought ETH in a way that made you guys money. So don't shake your fist at ETH when it's down. We like it when it's declining, okay? All right. But here's where I can give you some imagination. We have $13 billion of ETH. So imagine proposal 2 didn't pass and we're stuck in the water. We don't buy another dollar of ETH for the rest of the history of the company. But using staking yield and with some optimization that would generate $367 million to $390 million a year in rewards. We have $1 billion in cash that would generate another $35 million to $40 million. The company will generate $400 million to $433 million a year in pretax income. That's more than $1 million a day. And that's been achieved in 6 months. I think a company that goes from 0 in 7 months, to a company that can make $400 million a year, that's quite an achievement. But of course, thank you for the stockholders for getting us here. But let's think about our future scenario. Let's say that ETH's price stays at $3,000, but we get to 5% of ETH. That number rises to $542 million to $583 million. But I think ETH is grossly undervalued, okay? Let's see a proper price for ETH is $12,000, okay? And I'll explain in a later section how I get to $12,000. Then the annual rewards and interest jumped to $2 billion to $2.2 billion, okay? That would make us 1 of the 20 most profitable companies in America. So -- or maybe 30 at most, but it's really up there, okay? So that's why if our vision is correct on Ethereum, and we're generating this level of rewards and income you don't want us to just be a stake in entity. So that gets us to the second, which is we want to invest in moonshots. So far, we've done 2. We will do more, Orbs and Worldcoin. We want to accelerate tokenization products. We want to work with the L2s and the DeFis, the leading projects, including something like Lighter, and I'm going to have a fireside chat with Vlad today about Lighter and why you really should pay attention to Lighter and its token. And we're really excited about this Beast Industries moonshot. But just to remind you, Bitmine invested in Eightco $20 million, okay? Worldcoin. It was founded in 2019 by Sam Altman, who's OpenAI CEO; and Alex Blania. They have built an incredible technology for proof of human. It is the only way to verify your humanity today using an iris scan. They're not scanning your Iris. They're using your iris to create a cryptographic cash, but that is unique. Out of 7 billion people, that would be the only number cryptographically unique identification. It's -- the only thing more secure is a fingerprint. And Eightco done well. They hold 10% of the circulating supply of Worldcoin, 11,000 ETH, $69 million cash, and they verified 17 million humans. The Worldcoin app, if you haven't downloaded it, it's almost an omni app, it's that good. And they've done some cool pilot partnerships to do proof-of-human verification, sort of a single sign-on with Kraken and Coinbase. And they've also made strategic investments in something like Mythical. And of course, tokenization is the future, and that's why we want to do moonshots into tokenization. I might fork this conversation for a bit to explain to you, tokenization because I think people are underestimating how important it is. Tokenization does give you fraction ownership. It reduced cost and efficiency, 24/7 trading. Enhanced transparency and security and increased liquidity, okay? But I think it's really taking Wall Street into the future, okay? So it's a huge evolution. And in fact, Larry Fink said it's the biggest innovation since double ledger accounting. He's the CEO of BlackRock. So I'll just give you some examples of tokenization, I'm sorry, this is taking longer than expected, but I had to explain to you, Mr. Beast. So first, to tokenize something, you could just do fractional ownership. So you could say, take the painting and fractionalize it, and this is what you own. But what we believe is more important is to factorize an asset. So let's say you took the painting, you broke it down into the colors, okay? And it'd be the equivalent of like take a company and break it down to its components. Then you can decide that you just want to own a factor. So I'll give an example for Tesla. You can time tokenize the company, you can base it on -- remember, Tesla stock price is the sum of all future earnings. You could pick a single earnings year to own. It's a product tokenization. You can break it into its products, the present value is products. You can do geographic tokenization. And you can tokenize the financial statement, okay? Let's give you an example of time. Here's the -- all the future earnings of Tesla, and let's -- and we know Elon Musk gets paid on his 2036 earnings, okay? So you might just want to buy the earnings for that year because he is going to obviously have some enormous upside number to get paid. And that would be a lottery ticket because imagine you don't own any of the earnings for Tesla for the next 9 years, and you just own it for the 10th year. That's a huge way to make a bet. If you believe in Elon Musk, that would probably be the bet I would make. And you wouldn't pay a lot for it because it's 10 years from now. You can product tokenize. He's got EVs, robotaxi. I left off Optimus Prime. Full self-driving solar. Remember this, if you look at Tesla stock price, it's the sum of all the future product streams that are here. I forgot Optimus Prime. And then what -- then there's going to be this plug, which is the growth of Tesla in the future, which is Elon's brain, you can just make a bet on Elon's brain in the future. Okay. That's the kind of tokenization that can happen with smart contracts. And that's what I think a company like Lighter, that project could be the ones working with us to develop these tokenized products. That would be a future moonshot, right? We also -- the third pillar growth is we want to productize Bitmine. There's an app coming. We have a huge community of dedicated shareholders. And the Bitmine brand is strong. It's interesting. When we did the initial transformation of Bitmine, we're like, wait, we're in Ethereum treasury company, Why? And that was -- Bitmine was a Bitmine mining company. Shouldn't we change the name? Well, 7 months later, I think we like the Bitmine name. We're going to keep it. And of course, I've got a Bitmine lapel pin here. So an app is coming, and it's being developed by an outside technical team. Now you might wonder what are we going to offer on it. That's what you have to wait to find out. Okay. So next, the final pillar of growth is that we're going to bridge TradFi and DeFi. And TradFi means traditional finance and consumer services. Again, because we believe Ethereum is going to be the future settlement layer in the future of finance and we're the largest holder of Ethereum, we should act as that bridge where the top 50 most traded stock, MAVAN, when it launches is going to be the largest staking entity in the world. So once we launch MAVAN, we're the biggest staking operator in the world, I mean, think about that. Like we're not going to be small fry trying to get market share. We'll be the biggest. And that means we can actually act as a settlement layer for a lot of other -- for Ethereum and maybe other tokens as well. So MAVAN, as you know, it's going to be best-in-class staking. Again, we really don't want to divulge too many details before we reveal it, but this is what we've told you so far. So you can see where things sit. We're the largest holder of Ethereum in the world, we're going to bridge things in finance and in DeFi. So you should -- you realize the road map is quite optimistic ahead for us. I'm going to fly through this because I think I am running over time. So, Ethereum is the future of finance, okay. Let me fly -- take us to this slide. I am? Okay. If you're going to think about Ethereum price, you should think of it as its relative importance versus Bitcoin because the ETH BTC ratio is essentially saying, is Ethereum doing better than digital gold. And as the ratio goes up, that means smart contracts are more valuable than digital gold. And so that's how you should think about that price ratio. And currently, Ethereum to BTC is 0.03463, okay? In 2021, that ratio was 0.08727. In my opinion and many opinions of the team here at Bitmine, Ethereum is more useful now than it was in 2021. I mean the fees have come down. The amount of developers has expanded vastly. A use case has massively emerged, which is stable coins and now there's tokenization. And of course, there's going to be a bridge into the consumer through things like Beast Industries, right? So in fact, Standard Chartered, which is we think we've seen a lot of Wall Street research. I think Geoffrey Kendrick does some of the best work. He says 2026 is the year of Ethereum. He sees the ETH BTC ratio returning to its 2021 highs, okay? So he's using that metric. Well, let's think about that ratio. There's 3 sets of columns here. See the middle set of green. Yes, I mean it's so hard to see on the screen. So that's the 2021 high ratio, 0.0873. And then we put a little horizontal line because we expect Bitcoin to get to $250,000 this year. So if Bitcoin gets to $250,000, and Ethereum trades at its high relative to Bitcoin, Ethereum is at $22,000. And it's currently $3,200. And so you see the massive upside in Ethereum. Well, is that good or bad for Bitmine stock? See, I went to Bloomberg, did what they call historical correlation. The X axis is Ethereum's price since July, the Y-axis is Bitmine's stock price. And you can see if Ethereum's price goes up, Bitmine's stock price goes up. So the correlation is like 90-something percent which makes like intuitive sense. Well, let's shrink that a little bit and say, what if Ethereum gets to $22,000, what does this trend line project to, $500 price for Bitmine. If Ethereum gets to $62,000, the stock price is $1,500 and of course, if Joe Lubin is correct, as you know, he's been dedicated to Ethereum and I think he has a good argument for he thinks Ethereum gets to $250,000, Bitmine stock price is $5,000. First of all, that's why we need the share authorization because, I mean, how many people can buy a 5,000 share? Like people are going to buy like 1 share or 0.1 shares, right? So that's the upside. And then finally, we have a strong team, which I already introduced, but here are some of the members of the executive team. So I think that the presentation might have created some questions for you guys here. So I think we're going to have a few questions. So if you have a question, raise your hand. However, please do not ask about the shareholder vote. That's already concluded. I see a hand there.

Thank you for the question.

I think there's a microphone.

Thank you so much for the question, Mr. Chairman. Crypto holders will know the slogan, not your keys, not your crypto. How does Bitmine custody their private keys and prevent them being stolen or absconded, et cetera?

It's a great question, and it's a question for all the crypto treasuries. As you know, crypto is a bear instrument. What does that mean like if you buy crypto directly, you now have a private key that you're responsible for. And you can access it if you memorize the cryptographic hash or you have a password or some seed phrases or whatever. Now you met the executive team here. None of us has a memory to memorize all the cryptographic keys, especially buying $14 billion worth of ETH. So we do not custody the Ethereum ourselves. We use recognized and regulated custodians. Now we do not name our vendors for security reasons. But again, if you want to try to shake us down tonight, none of us has the private keys. So -- and it's the same structure as MicroStrategy. Michael Saylor does not keep a ledger wallet in his pocket for his $59 billion of ETH. He uses the same custodians. But for obvious reasons, I don't want to tell you more than that. I see a couple of questions here.

Thanks, Mr. Lee. I was wondering what does Vitalik Buterin think about Bitmine Immersion? What's his take on it?

Well, I've met Vitalik. Vitalik is very diplomatic because he doesn't want to bless winners and losers. And -- but he also recognizes the importance of community and users, and he has a vision around Ethereum. He doesn't necessarily believe Ethereum is created to become the next monetary system. However, it is literally the blockchain that's best for the future monetary system. There's a reason why JPMorgan is building their money market tokenized fund on Ethereum and why Robinhood is tokenizing stocks on Ethereum. And BlackRock is doing tokenized funds on Ethereum. So these do not make Vitalik unhappy. Now Ash, who's been one of our folks that have really connected to Ethereum Foundation, he might be willing to share us what he would be saying secondhand what Vitalik might think about Ethereum. I don't know if you're willing to -- and Bitmine. I don't know, Ash, if you want to make any comments?

Okay. Thanks, Tom. I think what's key and what's key with Bitmine and other DATs is that they are bridging the gap between Wall Street and what has been built over the last 10 years. Now I think Tom has been a key proponent here. If Ethereum was to have an Investor Relations man, he is the Chief of Investor Relations of Ethereum.

Ir@ethereum.org.

No. So it's great. And I think Ethereum will store most of the world's value at some point in time. And if you think about a technology that is storing most of the world's value tokenization, as Tom was talking about, that is where the collateral will exist, and that is where the capital efficiency of the world's financial system will exist. So I think Tom is a big proponent and driving Bitmine and global adoption of Ethereum. So from that perspective, I think he's a key stakeholder as is Bitmine.

Yes. And just to emphasize, I don't think Vitalik wants to pick winners and losers. So I don't think he views us as any more important than any other Ethereum DAT. And I think that's important because, as you know, we don't want -- like if you look at traditional equity markets, you don't want policymakers to pick winners and losers. You want the market to make that decision. So I really respect Vitalik's view. Okay. Other -- there's a few more questions. So can we hit this gentleman?

My question is about the current legislation, it's processing through our government. And specifically, if you would address this issue of the banks not wanting stablecoins to -- owners of stablecoins to receive a yield.

Yes. This gentleman is referring to the Clarity Act, which is making its way through Congress. I think some of the crypto industry and some of the lobbying groups that we work with are not happy with the current -- some of the current proposals. I don't really want to say too many things because remember, the audience who's watching the stream are people in the crypto industry, but also people in the traditional banking industry. And I don't want to have another -- I don't want to have a bull's eye on my back. So -- but what I would say is it's -- you realize the crypto industry and the traditional Wall Street banks have very different objectives when it comes to crypto regulation because the traditional banks want to stack it in their favor. They want to make it harder to be a new entrant, and they want to make it easy for them, for the banks to dominate by being like a big bully and saying, hey, listen, all you little pygmies, I just entered the room, and it's my game. Whereas the new entrants want a level playing field. They want the best projects to win. And it's already kind of been happening in crypto. Like Tether, if you guys know, Tether is the issuer of the USDT. They have 130 -- maybe -- I'm sorry, $180 billion of USDT outstanding. Let's say it's $190 billion. There's $19 trillion of dollar supply out there. So Tether has 1% of the money supply.

Is that right?

Yes, 1%. But Tether is going to earn close to $20 billion by making a stablecoin for 1% of all U.S. dollar supply. That makes it the sixth most profitable bank in the world, and its market value would be #2 only to JPMorgan. So this crypto-native stablecoin issuer is suddenly like the second biggest bank in the world. They only have like 300 employees. JPMorgan has 300,000. A crypto-native company using blockchain as settlement. And by the way, most of Tether runs on Ethereum, is like a better bank than a bank. So you can see why Clarity Act is -- it's kind of -- there's a big fight, right? There's what the crypto guys want versus what the banks want. But I don't have a view beyond that because again, this is all being streamed. I don't want to drink coffee and like get sick or something. Okay, there's a question here.

Great job, Mr. Lee.

Thank you.

I want to say you're #1 right here right now.

Thank you.

Anyway, I wanted to know what your thoughts were about BMNR. When will it top out this year? What month do you think it will reach its top? What month this year?

I can show you my diary and like every day, I have a target price. Here's the thing, like I really can't give you forward guidance because then we have to 8-K it. And then, of course, I already know from my days at Fundstrat, like if I say this is going to happen on this day, then everyone like marks in their calendar. And then all of a sudden, they're like hate me because they bought call options on that expiry date. But you saw the chart, like Ethereum is undervalued. Ethereum's ratio to Bitcoin should be going up a lot. I mean it should go beyond the 2021 high. And Bitcoin is undervalued because Bitcoin had a rug pull on October 10, and it's beginning to recover. Gold has been on a dramatic rise. Every dramatic rise in gold has been followed by a Bitcoin rally. And year-to-date, Bitcoin is beating Gold for the first time in many years. So I think Bitcoin should do well, which would mean if the ratio of Ethereum to Bitcoin goes up because Ethereum is already up 12% year-to-date, Ethereum should outperform dramatically. And then that's great for the stock price. So I mean if you're worried about Bitmine where it is now, just keep in mind, ask yourself these questions. Is Bitmine going to have a liquidity problem. That's $1 billion of cash. Does Bitmine have any debt coming due? 0 debt. Does Bitmine have to sell its Ethereum to fund operations? It's $400 million of pretax income a year. I mean no problem there. Is there a problem with Ethereum? Ethereum's usage is going through the roof. Fusaka upgrade happened late last year, use cases are growing. So I mean, if Bitmine's stock price is in the dumps, which it kind of is, is it because of anything fundamental? Not really. But when did Bitmine's price kind of take a hit? After October 10. I think all crypto kind of got hit after that liquidation event. But relative to other cryptos, especially DATs, only 2 since that period of time have actually sort of picked themselves off the ground and continue to buy crypto, which is Bitmine and MicroStrategy. So I hope that makes you feel better. But again, I can send you my diary later after this shareholder meet. Okay. Sorry, guys, one more question.

I get the last one. Sorry, guys. Tom, thanks for everything you're doing for all of us. We really appreciate you and the team. Being that Bitmine's role within the Ethereum ecosystem, the importance of it and how close we are to the 5% Alchemy? Has the consideration been given to go to 10%?

Yes. So the question is what -- if -- when we hit 5% of Ethereum, do we stop there? What if we go to 10%? We've asked that question a lot because we -- one of the reasons we picked 5% is because of the power law. The idea is that if you own enough of a network, you begin to have beneficial and unique influence, not on the network itself, but on people who want to interact with the network. So in other words, if we were only 1% of ETH, would we be invited to invest in Beast Industries? Probably not, right? They wouldn't care. Would we be the liquidity backstop for a lot of potential exchanges? Probably not because -- but we have like $14 billion of ETH. And it's no debt. I mean we can be liquidity for a lot of folks. And of course, that's why we could be the settlement layer. Does getting to 10% give -- bequeath us more benefit? It might, but we also don't want to crowd out the network because if you own too much of Ethereum, then you become a malevolent entity because all of a sudden -- you ever heard the phrase like, if you borrow money from the bank, they own you. But if you borrow so much money from the bank, you own the bank. Well, in a similar concept, we don't want to end up making this like to have so much Ethereum that we crowd out the voices. I mean Ethereum works because it's a huge community. So we want to balance that. So I don't know what the right number is, but one path is like we get to 5%, and we're just dividending a lot of return because of our alpha strategies and our moonshots or we see what level beyond that would be okay to pursue without having -- exerting too much influence. We just -- we want to keep Ethereum a decentralized network.

[indiscernible]

So well, I'd have to ask the master of ceremonies.

There was some controversy about Fundstrat giving 2 different stock prices of Ethereum. Can you comment on that by chance?

Yes. When I first entered Wall Street, someone gave me some advice. They said, Tom, if you want to be correct, make 300 forecasts. And one of them will be correct and you're never wrong. So I decided to say at Fundstrat, let's make 20 forecasts because one of them will be correct. I'm just kidding. That's -- what you're referring to is that in my other job, I'm the founder of Fundstrat, a research firm. I'm also the Chief Investment Officer of Fundstrat Capital, which, by the way, has reached $4.7 billion of assets under management, but -- thank you. And granny can hear. But at Fundstrat, we have 3 leading voices on markets. I do macro. I'm Head of Research; Mark Newton, who is our Head of Technical Strategy; and Sean Farrell, who does crypto strategy. Each of us looks and approaches crypto differently. I have a top-down view of Ethereum and Bitcoin. I'm not trading that position. I'm trying to keep you from being your own worst enemy. Most people make a mistake because they sell at the bottom. Ethereum is like at the bottom. I'm trying to convince you like in 2017, just stack your Bitcoin. Mark Newton is very tactical, and I consult him all the time. His time frame could be 5 days. It could be 2 weeks, 2 months, it can be 12 months. If it's 5 minutes, he's going to call me in the bathroom. I'm just kidding, he doesn't call me when I'm in the bathroom. And Sean Farrell, he manages a portfolio of crypto as if he's the portfolio manager. He's not -- he doesn't necessarily have a view. He might have a directional view. So the controversy that you're referring to is Sean Farrell said Ethereum would go to $1,800. It could go to $1,800 in December, okay? In December -- I'm sorry, in December, Sean Farrell said that Ethereum could go to $1,800 in January, whereas Tom Lee said Ethereum should rally in the first part of the year. And so therefore, I pulled Sean into my office, and I said, "Sean, listen, I'll give you $20 to change your mind." Just kidding. But Sean, of course, is managing a crypto Alpha portfolio. So that's just -- he's not pinning $1,800 and betting on it. He's just saying, I'm going to be cautious around ETH, maybe I'm a buyer there. But if you're a subscriber to Fundstrat, Sean has modified his view. There's been a recovery in price. So now he's buying Ethereum. So I don't think he would stick to that $1,800 view. So the Twitter world will say, "Hey, Fundstrat like thrown out 2 targets." It's not. It's just different voices. And if you're a subscriber to Fundstrat, you'd see it's not controversial. But by the way, if you'd like to get Fundstrat Research, you're welcome to sign up. Just kidding. Okay. Well, thanks. I think that concludes my part. Yes. Okay. Okay. So we're going to bring Vlad from Lighter up next, and we're going to have a fireside chat. Okay. Well, welcome, everyone. We have a fireside chat with Vlad. Vlad and I had a conversation ahead of this. And Vlad is a crypto native. So that means he is like high IQ, could be autistic, but super high IQ. And -- but also that the audience here is not likely to be crypto native. So we -- I want -- he and I had a conversation because we want to make sure that we keep this conversation in a way that kind of makes intuitive sense to whoever is here. And we apologize if someone who's watching live stream is a crypto native and thinks I'm asking repetitive questions. But I do want to sort of have a conversation where we can explain what Vlad and Lighter do, but then also why for us, for Bitmine, we want to be doing more things with Lighter. So Okay. So Vlad, could you just start with talking about yourself and your background?

Great. Thanks for having me, Tom, and great to meet everybody here. So I actually, funny enough, started out in TradFi about 20 years ago at a place called Citadel when they were just getting into high-frequency trading. So did that for quite some time kind of was through the crash of 2008, the flash crash of 2010 kind of solved what works well in TradFi and what some of the shortfalls might be. And came out to Silicon Valley in 2012 and spent time there mostly working on AI and fintech, but started following blockchain and crypto kind of from the sidelines investing in some projects, advising some teams, so on and so forth. And really, things became really clear about what value blockchain and particularly Ethereum can add to the financial system, and that's kind of what led us to Lighter.

Great. And I'm going to guess a lot of folks have not heard of Lighter. Would love for you to give us a top-down sort of explanation, and I can sort of expand on that a bit.

Yes, absolutely. So Lighter is a decentralized exchange built on top of Ethereum, and we can talk more about what that means, but you can trade spot assets like Ethereum, like our native token lid, other spot assets on Lighter. But the biggest market you can trade on Lighter right now are perpetual futures. So these are derivatives that unlike traditional futures that have an expiration kind of, you can trade them without an expiration and you don't have to roll them over, you can trade them with leverage. And Lighter, because it's on top of Ethereum, it's very secure. It's kind of one of the most secure settlement layer. Everything that happens on Lighter is verifiable. What that means is every single trade, every single order, every single liquidation, there's a proof that, that happened correctly and fairly. So for example, something like the Flash Crash wouldn't happen. And if there are big moves like on October 10, there's a record of exactly what happened, who got liquidated when and why and all that. But in terms of numbers, we have around $4 billion, $5 billion of daily volume at this point. We are live in many, many countries, hoping to be live in the U.S. soon, but have tens of thousands of daily traders and process hundreds of millions of orders a day.

Yes. And so Lighter is a decentralized exchange in somewhat, you may have heard of something like hyper liquid, and that's similar. But some of these folks might wonder how does your project differ from what they call centralized exchanges like Coinbase or Binance or others?

Yes. So Coinbase, and they're actually an investor in us as well. And so they're partners with us, and they're in a variety of businesses. But the main business that they're mostly known for is the centralized exchange. They also do, do stuff in DeFi where we can partner with them on so on. But the main thing that Coinbase does in their core business is where they custody your assets, you can trade at this point for U.S. customers, you can trade spot assets for -- they also have a perpetual offering for customers in other jurisdictions. But there, everything that happens kind of happens internally, both the custody and kind of the rules around matching and rules around risk and liquidations, all that kind of happens centrally as opposed to in a decentralized way, right? So that's kind of the main difference. Now there's different -- like if you look at the whole ecosystem, right, like you can -- there's the custody part then there's the part about what about -- how do you make sure the matching is fair, right? Like how do you make sure liquidations are fair. So there's kind of different aspects of what you want from a decentralized exchange. But at a very high level, like something that's completely centralized, there are some benefits to that as well, but we believe that kind of over time, the future is decentralized.

Great. Okay. So when we sort of finish with our conversation, if there are more questions, we may have some audience questions and to see if they need more explanation. But I wanted to sort of ask you very specifically about why did you decide to build on top of Ethereum?

Yes. So we started building in late 2022 when it was pretty clear after what happened with FTX and other things that we're seeing that a really strong decentralized exchange was something that was needed in the market, and we thought a lot about the architecture of that. It was pretty clear from the start that Ethereum is kind of the security layer, the layer that you can build upon, that's the kind of the most trusted, the most reliable has been around the longest of kind of any of the ones. And they already had a really strong DeFi ecosystem, which I think in part -- I think you made a point earlier that Ethereum -- Vitalik and others aren't necessarily pushing DeFi, but I think that's actually a good thing, right? Like it organically because of how secure it is, hundreds of billions of dollars. I mean I think when we started building, it was more like tens of billions of dollars, right? But like all of that -- all of those assets are secured by Ethereum. And so for us, it was very clear if we want to build something that has to do with finance, that's very hard technically to make it work to have a very efficient exchange. So that's why it was actually a hard technical lift for us to do. But there was always no question for us that, that's the ground security layer you want to build on top of it.

Yes. So the way you built on Ethereum is that you are the largest L2 today, if I'm correct?

Well, by certain metrics, so we're -- in terms of TVL...

One of the largest...