- Vitalik Buterin supports Ether treasury companies for broadening ETH access to more investors
- Buterin cautions against overleveraging, fearing it could lead to ETH’s downfall
- Public companies holding Ether now control nearly $12 billion in the token
Ethereum co-founder Vitalik Buterin has expressed support for the growing trend of public companies buying and holding Ether (ETH), calling it valuable for broadening the token’s exposure to a wider range of investors. However, he also warned that the trend could spiral into an “overleveraged game” if not handled responsibly.
Vitalik Buterin supports ETH treasury trend, but cautions on overleveraging
In an interview on the Bankless podcast released Thursday, Buterin highlighted the importance of these companies offering “more options” for those with different financial circumstances, particularly for those seeking exposure to Ether without holding the token directly.
Buterin noted that crypto treasury companies, which now manage billions of dollars to buy and hold cryptocurrencies, have become a prominent trend, with Bitcoin and Ether being the most popular choices. These treasury companies have gained significant traction, with major firms building substantial positions in ETH.
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Risks of overleveraging in ETH treasury companies
While Buterin acknowledged the value of ETH treasury companies, he stressed the importance of exercising caution with leverage. He warned that excessive leverage could lead to a chain reaction, where a drop in Ether’s price leads to forced liquidations, which could ultimately hurt the token’s price and damage its credibility.
If you woke me up three years from now and told me that treasuries led to the downfall of ETH, my guess for why would basically be that somehow they turned it into an overleveraged game, Buterin explained.
Despite this concern, Buterin is confident that investors in Ether are unlikely to follow a reckless path, differentiating them from the followers of failed projects like Terra (LUNA), whose collapse in 2022 left a lasting impact on the crypto world.
ETH treasury firms now control nearly $12 billion in Ether
The market for public companies that hold Ether has seen a dramatic increase, with these firms now controlling nearly $12 billion in ETH. Among the largest holders are BitMine Immersion Technologies and SharpLink Gaming, both of which have substantial ETH positions, with BitMine holding 833,100 ETH, valued at $3.2 billion.
These companies are part of a larger trend, with the Ethereum Foundation and PulseChain also ranking among the top holders. As of the latest data, the top 12 ETH treasury holders manage billions in assets, further cementing the importance of corporate adoption in driving Ether’s value.
Ether has experienced a volatile year, with its price dipping as low as $1,470 in April before recovering more than 163% to reach its current price of $3,870. This recovery has been partly fueled by the rise of ETH treasury firms, which have played a significant role in its resurgence. With ETH rallying, it continues to close the gap on Bitcoin and Solana, both of which have dominated the current bull cycle.
