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Bitcoin’s always been the superhero in the cryptocurrency origin story – all shadowy presence and market-moving powers. Ether’s been the dependable sidekick, clocking the hours but getting a lot less of the glory. But that dynamic’s been changing. Ether-focused digital asset treasury firms are turning investors’ heads – and stockpiling the world’s second-biggest crypto while they’re at it.
So here’s a look at what these companies actually do, how they work, and what to know before buying in.
Recent US rule changes have crypto’s future looking brighter. A new law dubbed the Genius Act clears the way for stablecoins, most of which run on Ethereum (with all the fees and transactions paid in ether). And the Clarity Act – which is expected to be approved later this year – should draw a clearer line between securities and commodities, making it easier for blockchain projects to innovate without wandering into murky legal territory. Both laws put decentralization front and center – and as the on-chain economy expands, that’ll likely lead to more demand for ether. The Ethereum blockchain powers most decentralized apps, including non-fungible tokens (NFTs) and DeFi (short for “decentralized finance – think lending, borrowing, and trading, all without banks).
The outlook’s already driving big flows into ether and ether ETFs. It’s also prompting some firms to rebrand as a digital asset treasury (DAT) company – with ether as their core asset.
DATs raise money and then use it to buy crypto like bitcoin and ether. Unlike ETFs or trusts, they can issue new shares or company bonds to expand their holdings, and often dabble in related activities like staking, DeFi yield, and crypto mining to boost returns. Those extras can lift the net asset value (NAV) per share – so investors may get more upside than from simply holding ether or ether-based ETFs.
MicroStrategy (which now goes by Strategy) became the world’s biggest DAT by loading up on bitcoin this way – and its stock has seen a stunning rally, as a result. Now several firms, like BitMine and SharpLink, are looking to do the same with ether.
DATs aim to amplify their net asset value using something called a NAV premium amplification strategy – essentially, crypto per share leverage. If the market price of a DAT’s shares is well above its NAV, the company can issue shares at that level and use the money to buy more crypto. This increases the crypto-per-share held by existing investors, boosting returns if prices rise – setting a self-reinforcing loop.
Some DATs are tapping into other financial instruments, too, like convertible bonds. Strategy has recently started using preferred shares – paying dividend yields near 10% – with the caveat that it can skip those payments if need be. It’s an expensive way to borrow, so bitcoin needs to move up more than 10% a year to make that cost worthwhile.
BitMine has been aggressively buying ether, since issuing new shares. This week, the firm announced that it holds 1.5 million ether, valued at $6.3 billion. It’s got big name-backing too: Tom Lee chairs the company, and Peter Thiel is behind its plan to eventually own 5% of all the ether in circulation – four times as much as it owns today.
SharpLink, a sportsbook marketing firm, made its ether pivot in May and is now the second-largest ether DAT. Ethereum cofounder Joseph Lubin is its new chair, and the company’s raised over $2.6 billion through a private investment in public equity (PIPE), at-the-market (ATM), and direct offerings. It now holds over 740,000 ether, valued at roughly $3.1 billion.
With the buying frenzy from those two firms and other players, it’s really no surprise that ether’s price has been rocketing. Still, it’s yet to surpass its 2021 record high.
It’s not an exhaustive list, but here’s what stands out.
Higher yields from staking and lending. Unlike ETFs, DATs don’t need to keep ether liquid for folks who want to cash out. And that means they can stake their full holdings. If staking yields around 4.5%, that gives DATs a big advantage: they can earn more than ETFs, which typically stake only half or two thirds of their ether so they can still handle potential withdrawals.
The potential for trading above NAV. BitMine’s ether strategy has been gaining investor approval – its shares trade at around 1.5x its mNAV multiple (market price per share divided by NAV per share), far more than SharpLink’s 1.2x. ETFs, by contrast, usually trade close to their NAV.
The prospect of raising money above and beyond NAV. In a bull market, DATs can issue new shares at a premium or issue debt and hybrid financing to boost their crypto exposure in ways that ETFs can’t. If a company can keep issuing new shares at a premium, then DAT companies can outperform their underlying assets, as it gives them crypto-per-share leverage, which can help sustain higher NAV premiums.
Decent access and compliance. Many investors – from everyday retail folk and giant institutional players – still can’t or won’t buy crypto directly. But DATs, with their SEC filings and familiar stock structures, give those investors a friendlier way in. And that opens the door to far more capital than most pure crypto plays might win
Premium erosion risk. Buying a DAT at a premium to NAV leaves open the possibility that the share price will fall back to NAV (or even worse, below it), if the management loses credibility or if the price of the underlying asset collapses. And DATs do tend to rely on issuing new stock or debt. If premiums vanish, and the company has issued shares below its NAV, that could hurt existing shareholders. And that’s because the DAT’s share price would likely lose more in a sustained down market, compared to an ETF.
And what you pay for. ETF charges are fixed and disclosed upfront, but with DATs, you’re indirectly paying for corporate expenses, share dilution, and sometimes opulent compensation packages. Now, that last one is likely only if the company does well, so presumably it would happen only after you’ve been rewarded for your investment.
When you invest in these ETFs or DATs, you’re essentially betting on the price of ether. And if the Ethereum network hits technical snags, faces stiffer competition, or runs into regulatory challenges, everything with ether exposure could take a hit.
If you’re deep into crypto already, you may well be staking ether yourself. But if not, an ETF is the cleanest, simplest way to get exposure to the world’s No. 2 crypto – without the hassle of a digital wallet and password.
DATs do come with more risk, but they also could see more upside. If ether continues to rally, BitMine and SharpLink are two of the market’s most established names. BitMine’s 1.5x mNAV premium looks rich, but if it plays its cards right, that added leverage could well pay off. Or, you could consider splitting your bet between the two.
Finimize Pro users can also run a handy Finimize AI snapshot on both stocks. It won’t calculate mNAV – which matters here – but it does serve up some useful background. Here’s what I got when I ran BitMine and SharpLink, and (just for giggles) what I got with smaller DAT company BTCS.
