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Vitalik Buterin says Ethereum treasury is ‘good’ but THIS risk remains
Ethereum founder Vitalik Buterin has expressed support for the cryptocurrency’s treasury system, stating that it provides a valuable option for companies to hold ETH as part of their assets. However, he warned against excessive debt leverage, which could potentially undermine the asset.
According to an interview with Bankless, Buterin emphasized that having Ethereum as an asset option in treasuries is “good and valuable” and gives investors more choices. This comes amid a significant increase in treasury holdings, with over 60 players acquiring over 3 million ETH valued at $11.8 billion, accounting for approximately 2.5% of the total supply.
Leading the charge are companies like BitMine Immersion Technologies (BMNR), which has taken on an impressive 833.1K ETH worth around $3.26 billion. SharpLinK Gaming (SBET) and The Ether Machine (DYNX) have also joined the fray, with respective holdings of 521.9K ETH and $1.35 billion.
The Treasury trend is not just limited to these names; in fact, it’s rivaled ETFs in terms of demand, according to Standard Chartered, with treasury stocks offering exposure to staking rewards and yields. However, the bank noted that treasury investments are better suited for investors due to their potential for higher returns.
On a separate note, market analysis suggests that many ETH treasury firms have seen their mNAV (market price to net asset value) drop significantly, indicating discounted levels per mNAV. This is indicative of fair value and could be viewed as an attractive opportunity for buyers if the dip in ETH’s price can be sustained or further increased.
It’s worth noting that BMNR and SBET appear to have maintained their relative value, with valuations at 1.47 and 1.15 respectively, implying they are fairly valued and a potential buy at current levels should Ethereum’s price rebound.
Meanwhile, on the market side, a significant increase in selling pressure has been observed as ETH approaches $4K once more, which contrasts to last week’s rally that lacked exchange inflow.
Source: ambcrypto.com
