[Short Note] Are BMNR / SBET Actually "Levered Bets" on ETH?

A Bird's Eye Glance at BMNR and SBET

Edit: The below charts have been updated to include SBET into the data set, per request (was initially just BMNR) on 8/16.

BMNR has outperformed ETH in sprints over specific windows of time in August - but to what extent could that be sustained? And how much value creation is derived from issuance against other sources?

Below I show 2 charts illustrating some precision around this for both BMNR and SBET over the last 30 days. 7/14 and 7/15 were picked as dates to initiate from as points of convenience per available disclosures (enables unit precision amongst KPIs such ETH owned, shares O/S, etc).

Also note that though the business model itself (diluting shares to acquire ETH) is alike between both companies - results have varied greatly on a month-over-month basis between the two:

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1) Value creation in market-cap terms - showing that market cap expansion has indeed materially been through share issuance¹²

This bridge attempts to allocate value in “buckets” - we should mention though that presenting the data like this does to some extent over-emphasize value attributable to issuance - for instance, if shares did not get issued, then presumably any dilutive effects on share price and mNAV would not occur. At the same time - these vehicles are created with a singular purpose of acquiring ETH - and so without financing, the flywheel would stall. Ergo, growth is tied to financing - and these charts correctly identify and weigh the latter in its effect on value creation.

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2) A side-by-side comparison showing that both BMNR and SBET returns have lagged behind ETH's, with BMNR's market-cap inflation outpacing that of its share price performance by a very rich ~10x as well

BMNR has been significantly more aggressive than SBET in the pursuit of harvesting volume traded through their respective ATM shelf offerings - and to huge success. Though the sample size of data is low (n= 30 days), we can reason that perhaps the market ascribes a “leader” premium on why a moat currently exists when it comes to BMNR vs SBET (homogenous business models) - the former has been able to consistently trade at a higher mNAV premium despite diluting shareholders significantly more.

Otherwise, this incredibly variant outcome between these two equities also showcases a tangible manifestation of “reflexivity”: a phenomenon where positive momentum may beget further momentum (more specifically, where a chain of market participants forecasts future participants to enter [consequently raising price as a result], and then pricing in such behavior as a reason to act in “front-running” that buying themselves).

1. BMNR: assumes ~54M shares O/S on 7/14 and ~200-230M shares O/S as of 8/15.

2. SBET: assumes ~96M shares O/S on 7/15. The Company disclosed through Q2 earnings that ~168M shares are O/S (created across ATM shelf & institutional offerings) as of 8/15.