Individual investors in overseas stocks, referred to as 'Seo-hak gaemi,' are flocking to Ethereum-related stocks amidst the stablecoin craze. It appears that corporations engaged in Treasury business are gaining attention as demand for Ethereum is expected to increase for stablecoin issuance.
According to Korea Securities Depository (KSD) on the 23rd, the most net bought overseas stock by domestic investors during the past week (July 16-22) was Bitmine Immersion Technologies (BMNR·Bitmine). The second place was Sharplink Gaming (SBET·Sharplink). Domestic investors purchased Bitmine and Sharplink stocks worth $82.77 million (about 114.3 billion won) and $72.53 million (about 100.1 billion won), respectively.
A month after Circle Internet and Coinbase pushed out major U.S. tech stocks, the 'Magnificent Seven (M7),' from the top two spots in net purchases, Bitmine and Sharplink have once again taken the lead.
Originally, Bitmine focused on Bitcoin mining, while Sharplink was a sports betting and marketing company. Both corporations have drawn attention from individual investors by engaging in Treasury business centered around Ethereum, the second-largest virtual asset by market capitalization.
The virtual asset Treasury business refers to the management and retention of cash assets owned by corporations as virtual assets. A representative example is Strategy (MSTR·formerly MicroStrategy), which has amassed bitcoins. Strategy's stock price has surged by 3,500% since the end of 2020, thanks to its Bitcoin Treasury business.
As stablecoins gain prominence, Bitmine and Sharplink are acquiring Ethereum as demand for Ethereum increases. Ethereum is regarded as having a well-established stablecoin ecosystem. Bitmine reportedly holds over 300,000 Ethereums, while Sharplink is said to own 360,000. They plan to continue increasing their Ethereum holdings.
Big investors have also begun investing in the two companies. Peter Thiel, the billionaire investor and co-founder of PayPal, publicly revealed that he purchased 9.1% of Bitmine's common stock through an investment fund. Known as 'Money Tree Sister,' Cathie Wood's Ark Innovation bought 4.77 million shares of Bitmine on the 21st (local time) through a block deal, estimated at $182 million (about 251.1 billion won).
The stock prices of the two corporations have also surged. Bitmine's stock price has increased over 800% in the past month, while Sharplink's stock price has risen by over 200% during the same period. The problem is that both companies' stock prices are highly volatile due to changes in Ethereum prices. In the case of Bitmine, the current stock price ($40.33) is about a quarter of its peak ($161) since its listing on the 5th of last month.
As a result, there are more investors facing losses despite the recent surge in stock prices. According to the average valuation loss rate of 3,536 Bitmine investors linked to Naver Pay's 'My Assets' service, it stands at 25.9%. Similarly, the average valuation loss rate for 4,120 Sharplink investors is 15.3%.