Ether Treasury Firms Face Mounting Risks Amid Yield-Chasing Strategies

Companies stockpiling Ether in search of maximum yield may be exposing themselves to significant risks if the market turns downward, according to Sharplink Gaming co-CEO Joseph ￰0￱ in an interview with Bankless on Monday, Chalom cautioned that firms aiming for “that last 100 basis points of yield” often underestimate the dangers ￰1￱ noted that while double-digit returns on ETH are possible, they come with substantial risks tied to credit, counterparties, duration, and smart contracts. “The biggest risk is that people who are far behind are going to take risks that I don’t think are prudent,” Chalom ￰2￱ Risks Could Damage the Industry Chalom expressed concern that reckless strategies by some treasury firms could taint the wider Ethereum ￰3￱ to him, how companies choose to raise capital or distinguish themselves through higher yields can have ripple effects across the market.

“If you overbuild and there is a downturn, how do you make sure your call structure is in such a way that you build to the highest price of Ethereum?” he ￰4￱ Gaming itself is one of the largest public Ether holders , with $3.6 billion in ETH on its balance ￰5￱ company trails only BitMine Immersion Technologies, which has amassed $8.03 billion. Collectively, ETH treasury firms currently hold around 3.6 million ETH worth approximately $15.46 billion, according to data from ￰6￱ Debate on Ether Treasury Models The model of crypto treasury firms has divided industry ￰7￱ Rupena, CEO of lending platform Milo and a former Goldman Sachs analyst, drew parallels to collateralized debt obligations and securitized mortgage baskets that triggered the 2008 financial ￰8￱ argued that aggressive ETH strategies could pose systemic risks if markets ￰9￱ take a more optimistic ￰10￱ Hougan, chief investment officer at Bitwise, suggested that Ether treasuries have helped resolve Ethereum’s “narrative problem” by presenting it in a format that traditional investors can understand, thereby driving adoption and capital ￰11￱ noted that while ETH treasury companies are “almost infinitely scalable,” their growth must be tempered with ￰12￱ comments come as broader doubts about crypto treasuries ￰13￱ analyst James Check and VC firm Breed have both warned that Bitcoin treasuries may face shorter lifespans and potential “death spirals,” highlighting that the risks may not be limited to Ethereum alone.