Ethereum News Today: Vitalik Buterin Backs ETH Treasury Firms Amid Leverage Warnings

Ethereum co-founder Vitalik Buterin has publicly endorsed the growing trend of Ether treasury firms, recognizing their role in expanding the token’s reach to a wider range of investors. In a recent interview with the Bankless podcast, Buterin acknowledged that these firms, which allow public companies to purchase and hold Ether rather than managing it directly, offer valuable flexibility and broader exposure [1]. He emphasized that such structures provide investors with more options, especially those with varying financial circumstances [1]. However, he also cautioned against the potential risks of overleveraging, warning that an unchecked rise in speculative activity could lead to a destabilizing cascade of forced liquidations [1].

The concept of crypto treasury firms has gained traction on Wall Street, with billions of dollars being funneled into public companies that hold large reserves of digital assets. Ether is among the most popular of these holdings, alongside Bitcoin. As of the latest data, the total market value of public companies holding Ether stands at $11.77 billion, led by firms such as BitMine Immersion Technologies and SharpLink Gaming [1]. BitMine alone holds 833,100 ETH, valued at $3.2 billion, placing it among the top four ETH holders globally [1]. SharpLink and The Ether Machine hold $2 billion and $1.34 billion in ETH, respectively [1].

Despite the momentum, Buterin highlighted the dangers of excessive leverage in the space. He outlined a potential worst-case scenario in which a drop in Ether’s price could trigger a wave of forced liquidations, further driving down the token’s value and undermining trust in the ecosystem [1]. He likened this dynamic to an “overleveraged game,” where the very mechanisms designed to boost demand could instead become a source of instability [1]. Yet, he expressed confidence that Ethereum investors, unlike those in the Terra ecosystem, have the discipline to avoid a catastrophic collapse [1].

Ether’s price performance in 2025 has reflected the volatile nature of the market, with the token falling to a low of $1,470 in April before surging more than 163% to $3,870 [1]. The resurgence has been partly attributed to the influence of treasury firms, which have helped narrow the gap between Ethereum and leading cryptocurrencies like Bitcoin and Solana [1]. The trend is now seen as a potential catalyst for a renewed DeFi (Decentralized Finance) boom, similar to the “DeFi Summer” events of previous years [1].

Buterin’s remarks underscore the dual-edged nature of Ether treasury firms. While they enhance the token’s adoption and liquidity, they also introduce systemic risks if leveraged irresponsibly. The balance between innovation and caution remains critical as the market continues to evolve [1].

Source: [1] Vitalik Buterin Backs ETH Treasury Firms Despite Leverage Concerns, Cointelegraph (https://cointelegraph.com/news/vitalik-buterin-backs-eth-treasury-firms-despite-leverage-concerns?utm_source=rss_feed&utm_medium=rss%3Frefresh%3D175****139205%26v%3D1754612139%26_refresh%3D7l4oexhz25%26__%3D175****139205&utm_campaign=rss_partner_inbound)