New research shows that Ethereum treasuries are becoming more profitable than their Bitcoin counterparts. However, they face unique challenges.
Advantages and Risks of Ethereum Treasuries
Research from Bernstein indicates that Ethereum treasuries can generate yield from staking, whereas Bitcoin treasuries rely on accumulation only. However, Ethereum treasuries face liquidity constraints and smart contract risks. Analysts noted that "the ETH treasury model has the benefit of actual cash flow yield driving operating earnings; however, liquidity risk and security would be important considerations."
Companies Invest in Ethereum Treasuries
Several companies, including SharpLing Gaming, Bit Digital, and BitMine Immersion, are focusing on accumulating Ethereum. In July 2023, their total stood at around 876,000 ETH, accounting for 0.9% of the total supply. BitMine Immersion also revealed plans to hold and stake around 5% of the total Ethereum supply.
Centralization and Risks on Decentralized Platforms
Bernstein warned about centralization risks related to token distribution and control. Key platforms such as Karpatkey and Llama are managed by a few core contributors, raising accountability concerns. Moreover, the lack of a clear legal framework threatens asset management.
Despite the risks and challenges, Ethereum treasuries continue to attract interest from companies and may set the foundation for new approaches to managing digital assets in the future.