Joseph Chalom, co-CEO of Sharplink Gaming, cautions that firms holding Ether and aggressively chasing high yields expose themselves to substantial risk, especially if market conditions worsen.
Chalom explained that similar to traditional finance, some players pursue the last increments of yield, mistakenly assuming they carry no risk. While double-digit returns on Ether (ETH) are possible, these come with significant dangers including credit, counterparty, duration, and smart contract risks.
He also noted that entities attempting to recover lost ground might take imprudent risks that could compound sector-wide vulnerability.
Industry-Wide Risks from Aggressive Strategies
Chalom expressed concern that reckless behavior within the Ethereum treasury domain—such as over-leveraging or overly optimistic capital structuring—could jeopardize the entire industry’s reputation and stability.
He questioned how firms would safeguard their financial structures in downturns to align with Ether’s highest price points, emphasizing the importance of prudent risk management.
Sharplink Gaming stands as the second-largest public holder of ETH, with assets valued at $3.6 billion, trailing behind BitMine Immersion Technologies, which holds approximately $8.03 billion.
According to StrategicETHReserve data, Ethereum treasury firms collectively hold around 3.6 million ETH, equivalent to roughly $15.46 billion at the publication time.
Concerns Over Model’s Potential Consequences
Josip Rupena, Milo’s CEO and former Goldman Sachs analyst, recently compared crypto treasury firms to collateralized debt obligations (CDOs) that contributed to the 2008 financial crisis, hinting at systemic vulnerabilities.
Conversely, Matt Hougan, Bitwise CIO, praised ETH treasury and holding companies for clarifying Ethereum’s investment narrative, making it more accessible to traditional investors and fostering wider adoption.
Chalom highlighted that Ethereum treasury firms are highly scalable, with Ether priced at $4,327 during this release.
However, skepticism about crypto treasury strategies has grown. James Check, lead analyst at Glassnode, stated his belief that Bitcoin treasury approaches may have a shorter effective lifespan than anticipated.
Additionally, venture capital firm Breed warned that only a few Bitcoin treasury companies are likely to endure and avoid damaging “death spirals” linked to those trading near net asset values.
