Ethereum co-founder Vitalik Buterin has voiced support for public companies holding Ether as part of their treasuries, while cautioning against the dangers of excessive borrowing.  Speaking in a Bankless podcast interview on Aug. 7, Buterin said that so-called Ethereum (ETH)…Ethereum co-founder Vitalik Buterin has voiced support for public companies holding Ether as part of their treasuries, while cautioning against the dangers of excessive borrowing.  Speaking in a Bankless podcast interview on Aug. 7, Buterin said that so-called Ethereum (ETH)…

Vitalik Buterin backs Ethereum treasury firms but warns of leverage risks

2 min read

Ethereum co-founder Vitalik Buterin has voiced support for public companies holding Ether as part of their treasuries, while cautioning against the dangers of excessive borrowing. 

Speaking in a Bankless podcast interview on Aug. 7, Buterin said that so-called Ethereum (ETH) treasury firms provide “valuable services” by giving more investors indirect access to the asset.

He noted that companies choosing to hold shares in treasury firms rather than ETH directly create “more options” for those with different financial needs, describing the trend as positive for Ethereum adoption. 

ETH treasuries, companies that raise capital to purchase and hold large quantities of Ether, now collectively control 3.04 million ETH. This translates to about 2.5% of the total supply, worth around $12 billion, according to Strategic ETH Reserve data. Bitmine Immersion Technology leads with 833,000 ETH, followed by SharpLink Gaming with 521,000 and The Ether Machine with 345,000.

Caution over “overleveraged game”

While supportive, Buterin warned that unchecked leverage could destabilize the market. He said that in a worst-case scenario, a sharp drop in ETH’s price could trigger forced liquidations across treasury firms, accelerating the decline and eroding confidence in the token.

Drawing a contrast with the 2022 collapse of Terra, Buterin suggested that ETH investors were better positioned to avoid reckless practices, saying, “These are not Do Kwon followers that we’re talking about.”

ETH traded at about $3,930 at the time of the interview, with the treasury trend continuing to grow in parallel with similar strategies seen in Bitcoin (BTC), where public firms have become major holders of the cryptocurrency.

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