Ethereum co-founder Vitalik Buterin has addressed the emerging trend of Ether treasury companies, highlighting both their strategic benefits and systemic risks for the cryptocurrency market.
These public entities acquire and hold substantial reserves of Ether (ETH), providing diverse investor groups with exposure to cryptocurrency assets without direct ownership.
Data reveals that leading Ether treasury companies collectively hold nearly $12 billion in assets. BitMine Immersion Technologies dominates this space, possessing 833,100 ETH valued at approximately $3.2 billion.
Buterin specifically warned about hazards stemming from excessive leverage within such companies. Forced liquidations during market downturns could trigger significant ETH price collapses and erode market confidence.
The Ethereum creator emphasized that while these entities broaden market participation, their leveraged positions may introduce destabilizing vulnerabilities to the broader ecosystem.