Standard Chartered Says Ethereum Treasury Firms Offer Better Value Than U.S. ETH ETFs

In recent months, publicly listed companies have increased their Ethereum holdings as part of treasury diversification amid growing digital asset adoption. Geoffrey Kendrick, head of digital asset research at Standard Chartered, says firms holding Ethereum are now more attractive investments than U.S.-listed Ethereum exchange-traded funds (ETFs).

Key Highlights

• Ethereum treasury firms are considered stronger investments than U.S.-listed ETH ETFs, according to Standard Chartered’s Geoffrey Kendrick.
• Net asset value (NAV) multiples for these firms are stabilizing above 1, indicating valuations close to the actual ETH they hold.
• Ethereum treasury firms currently hold about 1.6% of all circulating ETH.

From Bitcoin to Ethereum: A Shift in Treasury Strategy

Bitcoin has traditionally been the preferred cryptocurrency for companies integrating digital assets into their treasury plans. However, Ethereum is now gaining significant traction. Companies such as SharpLink Gaming and BitMine Immersion Technologies have steadily increased their Ethereum holdings, making ETH a core component of their corporate reserves. According to Kendrick, the market is beginning to adopt a more measured outlook on these Ethereum-holding firms. This is reflected in the NAV multiple—a ratio comparing market value to ETH holdings—which is normalizing and settling consistently above 1. This suggests investors value these firms at levels closely tied to the worth of the Ethereum they hold.

Why Ethereum-Backed Companies Hold an Edge Over ETFs

Kendrick argues that NAV multiples will not fall below 1.0 because these companies provide regulatory arbitrage opportunities for investors. He stated:

"I see no reason for the NAV multiple to go below 1.0 because I see these firms as providing regulatory arbitrage opportunities for investors."

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— Geoffrey Kendrick, Standard Chartered’s Global Head of Digital Assets Research

Ethereum treasury companies offer several advantages over U.S. spot ETH ETFs:
• Direct exposure to Ethereum’s price appreciation through their holdings.
• Ability to stake ETH and earn yield, unlike ETFs which hold the asset passively.
• As ETH’s value rises, the ETH-per-share ratio improves, potentially increasing the stock’s long-term value.
• U.S. spot ETH ETFs are restricted from staking or participating in DeFi, limiting returns to price movements alone.

Market Position and Accumulation Trends

Allocating Ethereum on corporate balance sheets has positively influenced stock performance for many firms. Investor interest surged following these moves, pushing NAV multiples higher. Recently, these multiples have begun to ease, aligning company valuations with more sustainable financial norms. SharpLink Gaming exemplifies this trend, having traded at a NAV multiple near 2.5, which has now moved closer to 1.0. Its market capitalization is just slightly above the value of its ETH holdings. Since June, Ethereum treasury firms have accumulated nearly as much ETH as all U.S.-listed Ethereum ETFs combined. Collectively, they hold about 1.6% of Ethereum’s total circulating supply, underscoring their growing significance in the Ethereum ecosystem. Kendrick expects this accumulation trend to continue as institutional attitudes toward digital assets evolve. With ETH offering yield through staking and broader network participation, it is positioned as a more functional and productive asset than traditional reserves like gold or cash. BitMine Immersion Technologies leads among public companies with 833,137 ETH valued at $2.95 billion. SharpLink Gaming has aggressively increased its holdings, purchasing 83,561 ETH last week at an average price of $3,634, worth $264.5 million, bringing its total to 521,939 ETH.

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Source: Standard Chartered Says Ethereum Treasury Firms Offer Better Value Than U.S. ETH ETFs

Frequently Asked Questions (FAQ)

Company Treasury Strategies

Q: Why are companies shifting their treasury strategies towards Ethereum? A: Companies are increasingly holding Ethereum as part of their treasury diversification strategy due to the growing adoption of digital assets. Ethereum's potential for yield through staking and broader network participation makes it an attractive alternative to traditional reserves like gold or cash. Q: What is a Net Asset Value (NAV) multiple in this context? A: The NAV multiple is a ratio that compares a company's market value to the value of its Ethereum holdings. A multiple above 1 indicates that investors value the company at a level close to or slightly above the worth of the ETH it holds. Q: How do Ethereum treasury firms differ from U.S. ETH ETFs? A: Ethereum treasury firms offer direct exposure to Ethereum's price appreciation and the ability to earn yield through staking. U.S. ETH ETFs, on the other hand, hold ETH passively and are restricted from staking or participating in DeFi, limiting their returns to price movements alone. Q: What are the benefits for investors in Ethereum treasury firms compared to ETH ETFs? A: Investors in Ethereum treasury firms can benefit from the potential for yield generation through ETH staking and participate in the growth of companies that actively manage their digital asset treasuries. These firms also offer regulatory arbitrage opportunities.

Ethereum's Role in Corporate Finance

Q: Besides Bitcoin, what other digital assets are gaining traction for corporate treasuries? A: While Bitcoin has been the traditional choice, Ethereum is now gaining significant traction. Companies are increasingly integrating ETH into their corporate reserves. Q: Can you provide examples of companies increasing their Ethereum holdings? A: Companies like SharpLink Gaming and BitMine Immersion Technologies have been actively increasing their Ethereum holdings, making ETH a core component of their corporate reserves.

Crypto Market AI's Take

The analysis from Standard Chartered highlights a significant trend in corporate treasury management: the growing appeal of direct Ethereum holdings via publicly listed companies over traditional ETFs. This shift is driven by Ethereum's unique ability to generate yield through staking, a feature unavailable to passive ETF structures. For investors, this presents an opportunity to gain exposure not just to ETH's price appreciation but also to the potential operational efficiencies and yield generation capabilities of companies actively managing their digital asset treasuries. As institutional adoption of digital assets continues to mature, we anticipate further exploration of such strategies, where the underlying asset's functionality, like staking rewards, becomes a key differentiator. Our platform actively tracks these trends, providing insights into how companies are integrating digital assets into their financial strategies, which you can explore further in our AI Crypto Market Platform.

More to Read:

• SharpLink Adds $264 Million in Ethereum to its Treasury
• The Future of Corporate Treasuries: Digital Assets and Beyond
• Understanding Ethereum Staking: How to Earn Yield on Your ETH