Bitmine, stock price dropped 30% but index inclusion is a boon...will it really enter Russell 1000?

▲ Ethereum (ETH)/AI generated image

Bitmine Immersion Technologies (hereinafter Bitmine) has been added to the preliminary list for inclusion in the Russell 3000, once again raising expectations for an influx of traditional financial capital into companies holding Ethereum.

According to cryptocurrency media outlet Cointelegraph on May 26 (local time), Bitmine, an Ethereum (ETH) treasury company, has been included in the preliminary list of potential additions to the Russell 3000 index. FTSE Russell, a subsidiary of the London Stock Exchange Group, released the preliminary inclusion list for the Russell 3000, which tracks the top 3,000 U.S. companies by market capitalization, last Friday.

Tom Lee, Chairman of Bitmine, stated on Saturday via X (formerly Twitter) that Bitmine also has the potential to be included in the Russell 1000. The Russell 1000 is an index that tracks the 1,000 largest U.S. companies, and Lee cited the index's minimum market capitalization requirement of $5.7 billion. Bitmine's market capitalization was $10.15 billion at the close of trading last Friday.

Lee said, "Many active managers only purchase stocks included in the Russell 1000." He added that up to 25% of the market capitalization of index-included stocks is estimated to be held by passive index funds or exchange-traded funds. If Bitmine enters the Russell 1000, it will be included in the same index as major U.S. stocks like Nvidia Corporation, Microsoft, and Apple, potentially generating automatic buying demand from passive funds.

FTSE Russell will provide additional list updates on June 5, June 12, and June 18, with the newly rebalanced index taking effect after the close of the U.S. stock market on June 26. However, Bitmine's stock price has fallen by over 30% this year, closing at $18.88 last Friday. The company announced plans to establish an Ethereum treasury strategy in July 2025, and on July 3 of the same year, its stock price surged above $135. On July 14 of the same year, the company disclosed that it held 163,142 ETH, with a holding value of approximately $500 million.

As of last week, Bitmine held 5.28 million ETH, accounting for approximately 4.37% of the total Ethereum supply. The company's ultimate goal is to secure 5% of the circulating supply of 120.7 million ETH, and it needs to acquire an additional approximately 756,538 ETH to reach its target of over 6 million ETH. Ethereum has fallen by over 57% from its all-time high of $4,946, and Bitmine is estimated to have recorded an unrealized loss of approximately $7.3 billion due to the price decline. Lee previously argued that Ethereum's sharp drop could provide an opportunity for further purchases, and last Monday, he stated that the company had staked most of its holdings, generating an annualized staking yield of $289 million.

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