Chairman Tom Lee called 5% a "hard cap." At ether's current price, the remaining purchases come to about $256 million, roughly six weeks at last week's pace.
For more than a year, BitMine Immersion Technologies has bought ether every week. Its chairman has now said when that ends.
"We only need to get another 100,000 ETH to get to 5%," Tom Lee said on stage at the TOKEN2049 conference in Singapore on Wednesday. "Now we're going to stop." He described 5% of ether's supply as a "hard cap" that "optimizes shareholder value."
"We thought this would take five years," Lee said. "It took us a little over a year."
The holdings
BitMine reported holding 6,016,414 ether on , about 4.9% of the roughly 122.1 million tokens outstanding. It bought $41 million of ether in the week before that update and reported $643 million of cash and marketable securities.
At Wednesday's price of about $2,559, another 100,000 ether would cost about $256 million. That is about 40% of the cash and securities the company reported. At last week's buying pace of $41 million, it would take about six weeks.
What changes and what does not
Lee's statement does not mean BitMine has stopped buying, or that it plans to sell. It means a recurring source of demand for ether now has a defined end point, probably before the end of the year at the recent pace.
That source has mattered at the margin. Corporate treasuries and exchange-traded funds have been the two main sources of steady demand for ether. U.S. spot ether ETFs have now recorded six straight days of outflows, including about $201.9 million on Tuesday.
The market's reaction
BitMine shares fell about 6.3% to $24.56 on Wednesday. Ether fell about 5.1%, and the iShares Ethereum Trust about 5.0%. The day's selling extended across crypto, with bitcoin down about 2.6%, so the declines cannot be tied to Lee's remarks alone.
What BitMine becomes
Once it stops buying, BitMine shifts from an accumulator to a company holding a fixed amount of ether, closer in structure to a closed-end fund. That raises a question about how the market values it relative to the ether it owns, and what the company does with the cash it no longer spends on tokens.
Three interpretations
One reading is that the end of BitMine's buying removes steady demand from a market already losing ETF flows.
A second reading is that a cap is disciplined. It stops the company from diluting shareholders to buy more tokens and frees cash for other uses, such as buybacks or earning yield by staking.
A third reading is that the amounts are small relative to ether's daily trading, so the cap matters more for BitMine's stock than for the price of ether.
The markers
BitMine's weekly holdings updates will show how fast it closes the gap to 5%. Its plans for the remaining cash, and whether its share price moves toward or away from the value of its ether once buying stops, will define what kind of company it becomes.