BMNR Defies Crypto Crash, Shows Signs of Strength

Bitcoin Dumps Lower After Dormant Whale Sells

A Bitcoin “whale” is an individual or entity that holds a large amount of the crypto asset. Because Bitcoin transactions are recorded on a public blockchain and can be traced, analysts can determine when these whales (smart money investors) sell. Sunday night, a dormant Bitcoin whale who had not moved his Bitcoin since 2018 finally sold some of his Bitcoin. Crypto website CoinTelegraph reported that the Bitcoin whale, worth over $11 billion, sold 22,769 Bitcoin worth $2.59 billion overnight. The combination of an illiquid Sunday night market, the size of the sale, and the fact that smart money was selling caused Bitcoin to drop more than 5% instantaneously. Ethereum, the second-largest crypto asset, dropped 5% in sympathy following the flash crash in Bitcoin.

Is the Ethereum Weakness Justified?

Last night’s crypto action is proof that crypto investors and traders often “shoot first and ask questions later.” CoinTelegraph reported that the Bitcoin whale took some of their massive Bitcoin winnings and parlayed it into a 472,920 spot Ether position, valued at more than $2.2 billion. In other words, the Ethereum sell-off makes little sense.

BitMine Bucks Ethereum Weakness

Bitmine Immersion (BMNR) is the largest ‘Ethereum Treasury’ company. Though the iShares Ethereum ETF (ETHA) is down more than 4% at the time of this writing, BMNR is bucking the weakness and is currently green for the session – a sign of bullish relative strength. Additionally, BMNR shares are finding support at the rising 10-week moving average after digesting July’s 3,000+% gains in an orderly fashion.

Zacks Investment Research
Image Source: Zacks Investment Research

Smart Money Loads Up on BMNR

Beyond the bullish relative price action, recent 13F disclosures show that ‘smart money’ investors are accumulating BMNR shares. Legendary investor Peter Thiel disclosed a 9% position through his venture capital firm Founders Fund. Meanwhile, George Soros’ prodigy Stanley Druckenmiller owns 2.5% of the firm.

Bottom Line

Sunday night’s Ethereum sell-off appears to be unjustified and due to a Bitcoin sympathy trade. Interestingly, Ethereum treasury firm BMNR is not only weathering the storm but showing impressive resilience.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

View Comments