Ethereum News Today: Ethereum Treasury Firms Face 2008-Warning Risks in Yield Hunt

Ethereum treasury companies that aggressively seek yield on their holdings face heightened risks in a declining market, according to Joseph Chalom, co-CEO of Sharplink Gaming. Chalom warned that firms trying to maximize returns through leveraged strategies—such as staking, lending, or yield farming—expose themselves to significant counterparty, credit, and smart contract risks. “People who are far behind are going to take risks that I don’t think are prudent,” he said, echoing concerns from other industry observers who have compared the model to the high-risk, opaque structures that contributed to the 2008 financial crisis.

Chalom’s concerns are particularly relevant as Ethereum treasury companies continue to expand their holdings. Sharplink Gaming, the second-largest public holder of ETH with $3.6 billion in holdings, recently acquired an additional 39,008 ETH at an average price of $4,531, bringing its total holdings to 837,230 ETH. BitMine, the largest Ethereum treasury company with $8.15 billion in ETH and 192 Bitcoin, added 153,075 ETH in a single week, raising its total ETH holdings to 1.866 million. These companies are leveraging institutional-grade capital and market structures to accumulate large quantities of Ethereum, positioning themselves as major players in the crypto ecosystem.

The appeal of Ethereum treasury companies has grown as their net asset value (NAV) multiples stabilize above 1.0, signaling renewed investor confidence, according to Geoffrey Kendrick, global head of digital assets research at Standard Chartered. Unlike U.S. spot Ethereum ETFs, which are restricted from staking and participating in DeFi protocols, treasury companies provide broader exposure to ETH price appreciation, staking rewards, and ETH-per-share growth. Kendrick noted that since June 2025, Ethereum treasury firms have acquired 1.6% of the total ETH supply, a trend that could accelerate as institutional investors seek alternatives to traditional ETF structures.

However, the model is not without its risks. Josip Rupena, CEO of lending platform Milo, has likened crypto treasury firms to collateralized debt obligations, warning of systemic risks if imprudent practices become widespread. Meanwhile, some companies that adopted similar strategies in the Bitcoin space have already experienced setbacks. For example, GameStop and Sequans Communications saw their stock prices plummet after initial gains from Bitcoin acquisitions, illustrating the volatility and potential for a "death spiral" when asset prices fall below net asset value. These companies raise capital, issue equity, and deploy funds into crypto, but the strategy can backfire when market conditions deteriorate, leading to forced liquidations and downward spirals.

The current Ethereum market is also showing signs of bullish momentum, with whale activity and global liquidity surges drawing comparisons to the 2017 breakout. Ethereum’s price has stabilized near $4,400, and analysts have drawn parallels to historical patterns preceding parabolic moves. Whale accumulation and staking yields, currently at 1.89%, are incentivizing long-term commitments, with 28% of Ethereum’s supply now staked. However, the risks of volatility remain, particularly with Ethereum’s Relative Strength Index (RSI) at overbought levels and the potential for a sell-off if the validator exit queue is triggered.

Experts remain divided on the long-term viability of the crypto treasury model. While some, like Matt Hougan of Bitwise, argue that Ethereum treasury companies have solved the digital asset’s narrative problem and accelerated adoption, others, including Peter Thiel, advocate for a more diversified and cautious approach. Thiel’s investment firm, Founders Fund, has allocated capital to both Bitcoin and Ethereum, emphasizing the importance of balancing exposure across different crypto assets. The debate reflects a broader tension in the industry between aggressive, single-asset strategies and more measured, diversified approaches to crypto investing. As the market continues to evolve, the sustainability of these treasury models will likely be tested during periods of volatility and regulatory uncertainty.

Source: [1] ETH Treasury Firms Pose Risks Chasing Yield: Sharplink ... (https://cointelegraph.com/news/ethereum-treasury-companies-greedy-risk-factors-sharplink-gaming) [2] Two Giant Ethereum (ETH) Bull Companies Are Back in ... (https://en.bitcoinsistemi.com/two-giant-ethereum-eth-bull-companies-are-back-in-action-announce-massive-acquisitions/) [3] Ethereum Treasury Firms Now More Attractive Than U.S. ... (https://cryptodnes.bg/en/ethereum-treasury-firms-now-more-attractive-than-u-s-spot-etfs-says-standard-chartered-analyst/) [4] Peter Thiel vs. Michael Saylor: Crypto treasury bet or bubble? (https://cointelegraph.com/news/peter-thiel-michael-saylor-crypto-treasury-bet-bubble) [5] Six Public Companies Betting on BTC That Failed (https://m.odaily.news/en/post/5206014)