BitMine Stock Slips as Short Seller Culper Slams Ether and Tom Lee over “Death Spiral” Fears

The debate over the future of Ethereum has turned hostile. In a report released Thursday, short-selling firm Culper Research announced it is betting against Ethereum (ETH-USD) and ETH-linked companies, specifically calling out BitMine Immersion Technologies BMNR -3.65% ▼ . BitMine’s stock slipped 3.65% at market close.

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Culper argues that Ethereum’s network economics have fundamentally broken following the Fusaka upgrade in December 2025. According to the firm, this upgrade flooded the blockchain with excess space, which caused transaction fees to crater by roughly 90%. Because validators rely on these fees for income, Culper warns that the resulting drop in staking yields could force a negative feedback loop that weakens network security and drives users away.

Culper Challenges BitMine’s Treasury Strategy

The report is aimed directly at BitMine, a company led by chairman Tom Lee that has turned into one of the largest corporate buyers of ether. BitMine has accumulated roughly 4.4 million ETH since July as part of an aggressive treasury strategy. However, the short seller points to data indicating that these holdings are currently 45% underwater, with BitMine sitting on approximately $7.4 billion in unrealized losses.

While Tom Lee has consistently defended the purchases by pointing to metrics like rising transaction counts and active addresses, Culper claims this data is misleading. Their analysis suggests that a large portion of that activity is actually the result of address poisoning scams, a tactic where attackers send tiny transactions to trick users into copying the wrong wallet addresses.

Culper Doubts Vitalik’s Leadership

Culper also highlighted the recent moves of Ethereum co-founder Vitalik Buterin, noting that he has sold nearly 20,000 ETH this year. The short seller used this to cast doubt on the confidence of Ethereum’s leadership, stating, “Vitalik is selling, while bulls like Tom Lee are clueless as to ETH’s new reality.” The firm emphasized that its position is aligned with the co-founder’s actions rather than the optimism often expressed by treasury firms. BitMine did not return a request for comment regarding the short report.

Is BitMine Stock a Good Buy?

Turning to TipRanks, BMNR stock has a Moderate Buy consensus rating based on two Buy ratings from analysts assigned in the last three months. The average 12-month BMNR price target sits at $34.50, implying an upside potential of 69.5%.

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