Supporters say treasuries boost Ethereum’s adoption and appeal.
Ethereum (ETH) has surged this year. However, the rapid rise of the ETH Treasury model is raising alarms among industry leaders.
While institutional demand for Ethereum grows, Sharplink Gaming co-CEO Joseph Chalom, during an interview with Bankless, cautioned that some ETH Treasury companies may be underestimating risks that echo the financial excesses of 2008.
Data from Strategic ETH Reserve treasury tracker shows the ETH Treasury model scaling fast. Bitmine Immersion Tech leads with 1.9 million ETH ($8.1 Billion), while Sharplink Gaming follows with 837,000 ETH ($3.6 Billion).
In total, public treasuries now hold on the order of 3-4 million ETH (roughly $14-16 Billion). Many of these firms raised capital (via equity or debt) specifically to buy and stake ETH.
For example, Sharplink has repeatedly tapped private investors to fund its ETH accumulation, publicly reporting weekly ETH-per-share metrics so holders can track its progress.
Against this backdrop, Chalom – a former BlackRock crypto executive – urges caution. In a recent Bankless podcast interview, he stressed that companies seeking “the last 100 basis points of yield” on Ether are courting trouble.
He noted that higher ETH yields almost always carry hidden risks: “credit risk, counterparty risk, duration risk, [and] smart contract risk.”
In other words, attempts to layer on extra yield can leave firms exposed if anything goes wrong. Chalom warned that firms “far behind” in their ETH accumulation may take imprudent gambles to catch up, potentially imperiling the wider sector.
He even cautioned that the ETH treasury model “could be tainted by people that do imprudent things,” such as overextending leverage or overly aggressive fund structures.
Chalom contrasts that with Sharplink’s approach. He emphasizes that SharpLink survives volatility by “keeping expenses lean, avoiding leverage, and being totally transparent.”
The company’s weekly ETH/share reports ensure investors see exactly how value is being created. In short, Chalom’s message is that ETH treasury firms should prioritize capital preservation. Otherwise, a downturn could force fire sales – echoing the cascade of 2008 – rather than delivering promised yields.
The cautionary tone is not limited to treasuries. Stablecoins – now a $280 Billion market – have drawn similar analogies.
Policymakers note that stablecoins tie crypto liquidity to the U.S. Treasuries, and some economists warn a sudden stablecoin run could resemble the 2008 money-market-fund panic.
Even as ETH firms diversify (several have added altcoins like TON, XRP, DOGE, and SOL to their reserves this summer), the underlying message is the same: hidden correlations and liquidity gaps could magnify shocks across crypto.
Despite concerns, others argue that the ETH Treasury model helps legitimize Ethereum for traditional investors. By packaging ETH in a treasury-style structure, companies provide Wall Street and institutions with a familiar entry point, accelerating Ethereum adoption.
Supporters highlight that ETH Treasury vehicles are almost infinitely scalable, aligning with the growing demand for regulated crypto products like ETFs and futures.
Still, the risks remain clear. As ETH trades above $4,300 and corporate treasuries grow, the sustainability of ETH Treasury strategies will be tested by future downturns.
Chalom’s warning is a reminder that transparency, conservative structuring, and prudent risk management are essential if the ETH Treasury model is to avoid repeating history.
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