Vitalik of Ethereum Advocates for Treasury Firms and Encourages Caution When Using Leverage
Ethereum co-founder Vitalik Buterin supported Ether treasury firms but cautioned that the movement might become an “overleveraged game” if it is not handled correctly.
During an interview with the Bankless podcast that was made public on Thursday, Buterin noted that the increasing number of publicly traded corporations purchasing and holding Ether is good because it exposes the token to a wider spectrum of investors.
“Valuable services are being provided there,” Buterin stated. He also said that when businesses invest in ETH treasury entities rather than owning the token directly, customers have “more options,” particularly those with “different financial circumstances.”
With billions of funds raised, the so-called crypto treasury businesses are a big trend on Wall Street, with Bitcoin and Ether being the most popular. Buterin gradually toned down his endorsement, emphasizing that ETH’s future cannot be jeopardized by overwhelming leverage.
Naturally, I would think that Treasury securities somehow made Ethereum an excessively leveraged game if you were to wake me up in three years and tell me that they were the reason for ETH’s demise. He outlined a worst-case scenario in which a decline in Ethereum’s price resulted in forced liquidations, further devaluing the token and undermining confidence.
Investors in ETH, according to Buterin, are disciplined enough to prevent such a catastrophe. He brought up the Terra blockchain’s co-founder, which crashed in 2022.
These are not Do Kwon followers that we’re talking about.”
The market for publicly traded companies holding Ether has surged to $11.77 billion, with BitMine Immersion Technologies and SharpLink Gaming at the forefront. BitMine is the fourth-largest cryptocurrency holding among public companies, with 833,100 ETH valued at $3.02 billion
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