Kerrisdale Capital Short-Sells Bitmine Amid Declining DAT Model

According to BlockBeats, Kerrisdale Capital, a well-known short-selling firm, has announced its decision to short-sell the stocks of Bitmine, a company involved in Ethereum treasury reserves. Kerrisdale Capital criticizes the Digital Asset Treasury (DAT) model, describing it as mundane and lacking innovation. The firm highlights that the market is saturated with similar projects, leading to a collapse in premiums and diminishing the ability to enhance per-share Ethereum content through stock issuance above net asset value (NAV). Companies pursuing the 'crypto asset treasury strategy' have collectively aimed to raise over $100 billion, undermining the scarcity that initially supported high premiums. Currently, many of these companies' stocks are trading at or below their net value, with self-reinforcing mechanisms stalling and models beginning to crumble. MicroStrategy (MSTR), one of the earliest DAT companies, has seen its premium drop from 2–2.5 times its net value to approximately 1.4 times. This decline is attributed to unpopular financing and policy fluctuations, which have eroded market confidence. Bitmine (BMNR) is experiencing a continuous decrease in its premium, with expectations of further decline to match or fall below its net value. As premiums decrease, the rate of per-share Ethereum appreciation slows, potentially dropping below 1. Currently, its market value to net value ratio (MNav) stands at about 1.4 times, indicating over 40% potential downside.