Buying Shares in Ethereum Treasuries
Buying shares in Ethereum treasuries is a better investment than buying ETH exchange-traded funds, an analyst wrote in a Wednesday note.
Standard Chartered digital assets researcher Geoffrey Kendrick wrote Wednesday that treasuries are offering shareholders better value for money as the net asset value—the per share valuation of the asset in an ETF—is increasing compared to ETFs.
“This normalisation of the net asset value multiple makes the treasury companies now very investable for investors seeking access to ETH price appreciation, increasing ETH per share (SBET uses an ETH concentration measure which is increasing) and access to staking rewards,” he wrote.
He added: “Given NAV multiples are currently just above 1 I see the ETH treasury companies as a better asset to buy than the US spot ETH ETFs.”
Kendrick’s note comes as the treasuries have mushroomed but also as investors have poured assets into the nine ETH funds currently listed. SharpLink (SBET) and BitMine Immersion, among others, already hold $1.9 billion and nearly $3 billion in ETH, respectively, over the few weeks since debuting their strategies.
ETH ETFs—approved last year—give investors exposure to the second largest digital coin by market value via shares that trade on stock exchanges. But companies have started buying ETH in the hope people will buy their shares as an investment.
ETH can generate users returns as the coins can be used in staking—a practice where holders lock up their tokens to support the cryptocurrency’s network in exchange for more ETH.
Kendrick noted: “ETH treasury companies are becoming more important, in terms of flows, than their BTC equivalents. Since the start of June they have bought 1% of all ETH.”
Both SharpLink and BitMine are copying the Strategy—formerly MicroStrategy—blueprint of buying digital assets to boost stock prices. Strategy first started buying Bitcoin in 2020 after years of low share prices and now holds 628,791 BTC worth over $72 billion.
The company now works to issue debt to buy Bitcoin, and investors purchase the company’s shares to get exposure to the leading digital asset.
ETH was recently trading for nearly $3,675 per coin, down 1.5% over the past week but up by close to 46% in the past 30 days, according to crypto data provider CoinGecko.
Roughly 50% of participants in a Myriad Markets prediction market say that Ethereum will breach $5,000 by the end of 2025.
(Disclosure: Myriad is a prediction market and engagement platform developed by Dastan, parent company of an editorially independent Decrypt.)