Ethereum treasury companies: Lubin touts DATs over Bitcoin
Background on Ethereum Treasury Companies
Ethereum treasury companies are increasing their presence in the digital asset space as more firms adopt Ether (ETH) as a strategic asset. This shift is inspired in part by the Bitcoin (BTC) treasury movement popularized by MicroStrategy’s Michael Saylor. Joseph Lubin, Ethereum co-founder and chairman of ETH-based treasury company SharpLink Gaming, recently elaborated on this approach at Token2049 in Singapore, comparing the potential of Ethereum treasury companies to those holding Bitcoin. His comments were made in an exclusive interview with Cointelegraph.
Lubin stated, “I’d much rather have something that potentially has more impact. It certainly is as solid as Bitcoin, and I would argue more solid because of the functionality and the organic demand for it to pay for transactions and storage,” according to Cointelegraph. He explained that his decision to head up SharpLink Gaming was inspired by Saylor’s Bitcoin treasury tactics, but with a focus on leveraging Ethereum’s unique capabilities and broad use cases.
Major Players and Current Holdings
SharpLink Gaming, listed on Nasdaq, has purchased over $2 billion in Ether since adopting its ETH treasury strategy in August 2023. Its current holdings have grown to 839,636 ETH, valued at approximately $3.69 billion. The largest player in the space, however, is BitMine, chaired by Tom Lee. BitMine has accumulated 2.65 million ETH, worth $11 billion, making it the dominant holder among Ethereum treasury companies.
Lubin noted a shift in strategy following Lee’s public announcement of targeting ownership of 5% of Ether’s total monetary base. Now, the focus for SharpLink is on growing the concentration of Ether per fully diluted share and continuing to earn yield through staking activities. Lubin also anticipates borrowing against SharpLink’s ETH and making investments in Ethereum-related companies and infrastructure, reinforcing the idea that these treasury companies will play a vital role in the ecosystem’s future.
Market Dynamics and Future Outlook
Lubin predicts a “broadband moment” for Ethereum in 2025, describing a phase when Ethereum becomes highly scalable both horizontally and vertically while seeking increased usage for its abundant, inexpensive block space. He identified an excess of block space over the past 18 months due to rapid scaling, which resulted in lower on-chain activity but potentially sets the stage for future growth as new projects and users enter the network.
SharpLink and other Ethereum treasury companies plan to further stimulate demand for ETH by acquiring tokens, using them in staking, and investing in decentralized applications. Lubin pointed out that, “The financial industry is rushing into our ecosystem,” and added that growing attention may drive up ETH prices as supply tightens.
Despite enthusiasm, there are concerns about the risks of treasury companies using significant leverage to accumulate protocol tokens. While Lubin downplayed the possibility of a systemic collapse, he cautioned that over-leverage must be avoided to prevent negative outcomes.
What’s Next for Ethereum Treasury Companies
As Ethereum approaches its anticipated broadband moment, the strategy of treasury companies accumulating, staking, and deploying Ether could help propel both the asset and its ecosystem forward. The additional yields and investment opportunities provided by these companies are viewed as comparable, if not superior, to those offered by Bitcoin treasury strategies, reflecting a broader shift among treasuries toward more versatile digital assets like ETH.
For further insights on cryptocurrency trends and treasury strategies, see the Vizi cryptocurrency section.
