The corporate buying experiment for Ethereum appears to be unraveling in real time. The world's second-largest cryptocurrency by market cap, Ethereum, fell below $3,400 on Tuesday. As Wall Street's AI-driven stock market euphoria significantly waned, risk appetite plummeted, dragging down Ethereum, Bitcoin, and other cryptocurrencies alongside the broader tech stock sell-off—though crypto declines were far steeper.

This synchronized sell-off in tech stocks and cryptocurrencies—two historically correlated risk assets—has erased 30% of Ethereum's value from its August all-time high, returning prices to levels seen before a wave of U.S.-listed companies aggressively hoarded the token. These "treasury firms," which poured idle cash into crypto, now face depleted reserves and may offload holdings to lock in profits, potentially cementing Ethereum's bearish trajectory.

Bitcoin, the largest cryptocurrency, has fared slightly better but still suffered steep losses, wiping out summer gains fueled by Wall Street's ETF frenzy and institutional demand. During Tuesday’s New York session, Bitcoin plunged 7.4% to $96,794, dipping below $100,000 for the first time since June—a 20% drop from its recent peak, mirroring the Nasdaq 100’s correction.

Market research firm 10x Research revealed that Ethereum’s most aggressive corporate backer, BitMine Immersion Technologies Inc. (BMNR.US), now faces over $1.3 billion in unrealized losses. Backed by Silicon Valley billionaire Peter Thiel and helmed by Wall Street veteran Tom Lee—dubbed the "Oracle" for his prescient bull market calls—BitMine adopted a strategy akin to MicroStrategy’s Bitcoin treasury play, acquiring 3.4 million Ethereum tokens at an average cost of $3,909. With its war chest exhausted, BitMine is under mounting pressure.

"BitMine has been central to Ethereum’s bull narrative and capital inflows for months," noted 10x Research. "Now, with no dry powder left and $1.3B underwater, its role as a market stabilizer is in jeopardy." Retail investors who bought BitMine shares at premiums to NAV were hit hardest, with little appetite for "catching the falling knife."

Tom Lee, BitMine’s chairman and co-founder of Fundstrat Global Advisors, didn’t immediately respond to requests for comment. Known for accurately predicting the S&P 500’s 2023-24 rally amid 2022’s pessimism, Lee’s reputation as Wall Street’s "Oracle" is now tested.

BitMine pivoted from mining to an Ethereum treasury strategy, treating equity as a "funding engine" and ETH as a "high-beta monetary asset." While similar to MicroStrategy’s Bitcoin play, Ethereum’s staking and utility layers added complexity—and potential alpha.

The firm’s bet wasn’t just a balance sheet trade; it envisioned digital assets as corporate financial infrastructure, elevating Ethereum’s mainstream role. Proponents like Lee argued that locking ETH in public treasuries would seed a decentralized economy where code replaces contracts. This thesis fueled Ethereum’s summer surge toward $5,000, with ETFs attracting $9B in July-August.

But the tide turned after October 10’s crypto crash: Ethereum ETFs saw $850M outflows, and open interest in futures contracts dropped by $16B. Lee’s year-end $16,000 price target now seems distant.

BitMine’s market cap-to-NAV multiple collapsed from 5.6x in July to 1.2x, with shares down 70% from peaks. Like Bitcoin-linked firms before it, BitMine now trades closer to its underlying holdings as crypto premiums evaporate.

Last week, smaller Ethereum holder ETHZilla (ETHZ.US) sold $40M of ETH to buy back shares, aiming to normalize its NAV discount. "We’ll continue selling ETH for buybacks until the discount closes," it stated.

Despite the slump, Ethereum’s fundamentals remain strong: it processes more on-chain value than rivals like Solana, and its staking mechanism offers yield and deflation. Yet with Solana’s tech gains, ETF outflows, and retail fatigue, the bull case for corporate buying as a price anchor is fading.

Ethereum, an open-source blockchain for dApps and smart contracts, differs from pure cryptocurrencies by enabling decentralized code execution. But Solana—boasting faster speeds and lower fees via its hybrid PoH/PoS consensus—is emerging as a formidable "Ethereum killer" for token launches.