BitMine, led by Tom Lee (톰 리), has increased its Ethereum (ETH) holdings to 5.9 million, moving close to its goal of securing 5 percent of total circulating supply. An analysis says the company could approach the target without additional purchases if it simply maintains rewards generated from its staked holdings.

On Sept. 6 (local time), blockchain outlet CryptoSlate reported that BitMine bought an additional 53,501 ether during the week through Aug. 30. That lifted the company’s total ether holdings to about 5.9 million.

Of that, 5,067,309 ether is deposited for staking. The annualised staking yield over the latest 7 days was 2.67 percent.

Signs of further buying have been detected even after the official disclosure. Blockchain analytics firm Lookonchain said on Sept. 1 that wallets linked to BitMine appeared to have secured an additional 51,000 ether worth about $126 million via FalconX and BitGo. The transaction was not officially confirmed in BitMine’s latest disclosure.

Based on BitMine’s stated ether circulating supply of 120.7 million, 5 percent would be about 6.035 million. Compared with holdings of 5.9 million as of Aug. 30, the company is short by about 134,000 ether.

The picture changes if current staked volume and yields are maintained. Applying an annualised yield of 2.67 percent to 5,067,309 ether generates about 135,000 ether in staking rewards over a year. On a simple calculation, staking rewards alone would be enough to reach the 5 percent target without further purchases.

If the suspected additional buying is reflected in actual holdings, the amount needed to meet the target would fall further. With an additional 51,000 ether, the shortfall drops to about 83,000 ether. If the current staking yield holds, retaining only about 61 percent of rewards generated over a year would be enough to exceed the 5 percent goal.

Even so, reaching the 5 percent target is not guaranteed. The biggest variable is total ether supply. As of Sept. 5, Etherscan showed ether issuance of about 122.02 million. On that basis, BitMine’s Aug. 30 holdings fall to about 4.84 percent of total supply. In that case, the ether needed to secure 5 percent rises to about 200,000.

The longer the timeline, the greater the impact of supply growth and changes in staking yields. Under the assumption supply stays at current levels, BitMine could approach the 5 percent target in 2 years by retaining only about 74 percent of future staking rewards.

But if the annual supply growth rate rises to 0.5 percent, the required share of rewards to retain climbs to about 96.5 percent. If annual supply growth reaches 1 percent, the firm would find it difficult to meet the target without additional buying even if it retains all staking rewards.

Staking yields are another variable. If the yield falls from 2.67 percent to 2 percent, annual rewards generated from 5.06 million ether would decline to about 101,000 ether. That would lengthen the time needed to fill the gap through staking alone.

As a result, market focus is shifting from the scale of BitMine’s additional purchases to how it uses staking rewards. BitMine said it could periodically convert staking rewards into dollars, but it did not present a fixed ratio for how much of those rewards it would continue to hold in ether. Holding staking-generated ether would increase holdings without additional market purchases, while cashing out could fund operating costs or payments related to shareholders.

Its cost structure could also influence that choice. A management agreement between BitMine and Ethereum Tower includes performance-linked fees as well as infrastructure and custody-related costs. BitMine has declared 17 cash dividends on BMNP preferred shares, with payments scheduled to continue through the end of December.

The company’s quarterly report also warned that changes in the ether price and staking yields could affect its operating costs and its ability to raise funds for preferred-share dividends. If it must sell ether received as staking rewards, the amount available to meet the 5 percent goal could shrink.

Ultimately, what matters in BitMine’s strategy to secure 5 percent of ether is not simply how much additional ETH it buys. How much of future staking rewards it retains, and how overall ether supply and staking yields change, are expected to determine the speed of reaching the target.

Based on current holdings alone, BitMine is already quite close to its 5 percent goal. If additional purchases continue, the gap would narrow further. Still, whether it can keep reinvesting staking rewards rather than cashing them out is likely to be a key variable in assessing BitMine’s ether treasury strategy.