Companies that hold Ether (ETH) while chasing maximum yield could face heightened risks if the market turns downward, according to Sharplink Gaming co-CEO Joseph Chalom.
“There will be people, just like in traditional finance, trying to capture that last 100 basis points of yield, assuming it’s risk-free,” Chalom said in a Monday interview with Bankless.
While double-digit yields on Ether are achievable, Chalom cautioned that they come with significant exposure. “It comes with credit risk, counterparty risk, duration risk, and smart contract risk,” he noted. He also warned that firms attempting to recover losses quickly may take imprudent risks. “I think the biggest risk is that those who are behind are going to take risks that I don’t think are prudent.”
Industry Could Be Impacted by Risky Moves
Chalom added that the broader crypto sector could be affected by companies taking reckless approaches to raising capital or generating yield from ETH holdings. “If you overbuild and there’s a downturn, how do you structure your positions to withstand Ethereum’s highest price?” he asked.
Sharplink Gaming currently holds $3.6 billion in ETH, making it the second-largest public Ether holder behind BitMine Immersion Technologies, which holds $8.03 billion.
Ethereum treasury companies currently hold roughly 3.6 million ETH, valued at approximately $15.46 billion at the time of publication, according to StrategicETHReserve data.
Some Warn of Potential Risks
Josip Rupena, CEO of lending platform Milo and a former Goldman Sachs analyst, recently told Cointelegraph that crypto treasury firms could pose risks similar to collateralized debt obligations—bundled mortgages and other debt instruments that fueled the 2008 financial crisis.
Others See Positive Impact
In contrast, Matt Hougan, chief investment officer at Bitwise, argued that Ether treasury and holding companies have addressed Ethereum’s narrative problem. By packaging the digital asset in ways traditional investors understand, they are attracting more capital and accelerating adoption.
Sharplink Gaming co-CEO Joseph Chalom noted that “the beautiful thing” about ETH treasury companies is their near-infinite scalability. At the time of publication, Ether was trading at $4,327, according to CoinMarketCap.
Broader Concerns Mount
Concerns over the crypto treasury model have intensified. Glassnode lead analyst James Check posted on X on July 5 that his “instinct is the Bitcoin treasury strategy has a far shorter lifespan than most expect.”
Similarly, VC firm Breed warned on June 29 that only a few Bitcoin treasury companies will survive long-term, while many others risk falling into a “death spiral” if BTC holdings trade close to net asset value.
