How South Korea’s retail investors kept buying the ether hoarder after a brutal 80% collapse — and why markets should care

Retail demand kept propping up a one-way ETH bet — and the market noticed

A small-cap mineral miner-turned-crypto treasurer has become a lightning rod for fast-moving money. BitMine’s shift into holding ether sparked a manic run that at times looked more like a crypto ETF than an ordinary stock. The share price shot up in a matter of weeks, pulled mostly by domestic retail investors in South Korea, then plunged roughly 80% from the peak. Despite the collapse, fresh buying continued, driven by momentum and the belief that an ether-priced balance sheet creates outsized upside for equity holders.

That behaviour matters because the company’s equity now behaves like a levered bet on ETH. When lots of small traders pile into a single, volatile name, liquidity and contagion risks rise — for crypto markets, small-cap stocks and even derivatives desks that have to hedge fast, at scale.

Flows, frenzy and the price story behind the headlines

The headline figures are stark: a multi-thousand-percent rally from the idea of an ether treasury, followed by a collapse that erased almost all of the gains. Retail inflows — largely from Korean brokerages and local platforms — dwarfed institutional interest for much of the move. Reported net retail inflows into the stock and closely related leveraged products reached the low billions of dollars at the peak of the mania, the same week volatility in ether spiked.

Trading volume in BitMine exploded as ordinary investors chased a story with a simple promise: the company’s shares would mirror gains in ether because the firm was building a huge ETH reserve. That expectation produced extreme correlation between ETH spot moves and BitMine’s intraday price swings. On rallies in ether, BitMine jumped many times over, and on ether sell-offs it fell much harder — which explains the roughly 3,000% ascent and the roughly 80% crash that left many late buyers nursing losses.

Two feedback loops were obvious: rising prices attracted more retail buyers (momentum), and heightened volatility attracted short-term traders and leveraged bets. When supply dried up on the sell side, price moves became outsized and quick, pressuring market makers and brokers to hedge aggressively — which amplified the swings even further.

Why an ether treasury turns ordinary shares into an amplified crypto bet

BitMine’s core shift was simple on paper: use cash, debt or mining proceeds to buy and hold ether as a company asset instead of or alongside running mining operations. That creates a direct exposure for the balance sheet to ETH price moves. But equity claims sit on top of that balance sheet, so shareholders effectively own a leveraged exposure to any change in the value of those ether holdings.

Imagine the company holds a large stash of ETH that represents a big fraction of its market value. A 10% move in ether then makes a much larger percentage change to equity because the market prices the stock around the net value of assets minus liabilities. That gives shareholders convexity — big upside on rallies and deep losses on sell-offs. It also means investors are betting on management’s ability to value, custody and, if needed, liquidate those ether holdings without market impact.

Operationally, risk mounts fast. Valuing a large, illiquid ether reserve is hard in volatile markets. Custody arrangements, withdrawal limits, counterparty risk at exchanges and the tax treatment of a corporate crypto treasury all matter. When the market doubts any of those elements, the equity price can gap sharply lower as investors demand a discount for uncertainty.

Who kept buying after the crash — and why they stayed

The core buyers were South Korean retail traders, often called ‘ant’ investors for their sheer numbers and home-market loyalty. Two psychological drivers stood out: convexity-seeking and momentum chasing. Convexity-seekers believe a beaten-down, crypto-backed stock can snap back far more dramatically than a normal small-cap. Momentum players jumped back in because every bounce was public and fast; the fear of missing the next leg up proved stronger than the fear of further losses.

Local market structure reinforced this behaviour. Low-cost margin, easy access to trading apps, and a cultural appetite for high-volatility home-market stories mean traders were ready to buy dips and hold through swings. That helped sustain turnover and kept spreads wide, which in turn allowed the company’s stock to keep moving independently of fundamentals for longer than many would expect.

Where the real dangers lie — and how this could spill over

There are four main risk channels. First, liquidity and leverage: if retail-driven supply dries up, forced selling by leveraged players or hedging desks can produce sharp losses that cascade across small-cap and crypto-related names. Second, concentration: a large corporate ETH reserve concentrated in one firm creates valuation and counterparty risk that’s not present in diversified ETFs or institutional treasuries.

Third, custody and valuation risk: doubts about where ETH is held, how easily it can be sold, and how management prices it can trigger steep discounts. Fourth, regulatory and anti-money-laundering scrutiny: domestic regulators will watch closely when retail money moves rapidly into an asset that ties a listed company to a volatile crypto market. Any signs of regulatory action, custodial freezes, or tax disputes could prompt cliffs in both the company’s stock and related crypto prices.

Put together, these vectors can create contagion: trading desks forced to unwind positions, retail panic selling, and knock-on effects for ETFs and other small-cap stocks that have adopted similar balance-sheet strategies.

Short checklist of near-term events that will move prices

Watch these items carefully: upcoming regulatory statements in South Korea about corporate crypto treasuries; the company’s quarterly balance-sheet report showing exact ETH holdings and custody arrangements; sudden large transfers of ETH to exchanges or cold wallets; continued daily trading flows into the stock and any related leveraged products; and price action in ether itself. Any one of these can flip sentiment quickly.

Among market signals, the clearest are changes to reported ETH holdings and transparent custody confirmation. If management discloses more detail and proves it can move ETH without market disruption, the risk premium could drop. If opaque disclosures or withdrawals to exchanges appear, expect further volatility and likely higher discounts on the equity.

Data sources and where to look next

Primary public data on flows and holdings will come from Korea’s securities depository, brokerage-level trading records, and corporate filings. Crypto market data is available from mainstream price trackers and on-chain explorers that show major wallet movements. Industry reporting from coin desk-style outlets and market terminals provides colour on order flows and broker behaviour. Note that corporate disclosures often lag real-time trading, and on-chain movements require careful interpretation to link them to specific corporate wallets.

Sources

• linkedin.com
• coindesk.com
• indices.coindesk.com
• coindesk.com
• coindesk.com
• coindesk.com