Ethereum on-chain revenue drops to $600 million; Is BMNR's heavy ETH holding strategy facing a test?

As blockchain applications continue to grow, scalability issues have become a core challenge that public chains cannot avoid. Ethereum (ETH) has been actively developing Layer-2 scaling solutions in an attempt to increase throughput and reduce transaction fees while avoiding long-term network congestion. This strategy has achieved certain success in user experience and is seen as an important pillar for Ethereum’s mainstream adoption.

However, from an economic model perspective, this pillar is facing pressure. Data shows that Ethereum’s on-chain revenue has significantly declined this year, dropping from approximately $2.52 billion at the beginning of the year to about $604 million. Behind this decline is the reality that transaction fees are being heavily diverted to Layer-2 networks.

Taking Base as an example, this Layer-2 has accumulated approximately $8.3 million in revenue over the past 365 days, but only about 8%, or roughly $6.7 million, has been settled back to the Ethereum mainnet. Similar situations exist with mainstream L2 networks such as Arbitrum, Optimism, and Polygon. As more transactions are completed on Layer-2, the fees directly collected by the Ethereum mainnet continue to be diluted, weakening the ETH deflation narrative.

A decrease in revenue usually indicates a decline in the transaction value density on the mainnet. When transaction fees cannot effectively offset the increase in supply, Ethereum’s net inflationary pressure rises, which suppresses its price. Against this backdrop, BitMine (BMNR)’s heavy holding strategy on Ethereum has begun to be questioned by the market.

Public information shows that BMNR holds about 3.66 million ETH. Recently, wallets associated with BitMine increased their holdings by 38,596 ETH within two days, but this scale of buying did not significantly impact the market price, which remains below $3,200.

In comparison, BMNR’s own market performance is under greater pressure. Its token has fallen over 9% on the daily chart, with a cumulative decline of 32% in the fourth quarter, potentially making it the weakest quarter since Q3 2022.

From current data, the weak on-chain fundamentals combined with changes in Ethereum’s fee structure make BMNR’s ETH accumulation more akin to speculative behavior based on price expectations rather than a strategic layout built on strong fundamentals. If Ethereum’s revenue structure and inflationary pressures cannot improve in the short term, the risks associated with BMNR’s highly concentrated ETH holdings are likely to continue reflected in its market value fluctuations.