Ethereum treasury companies are gaining popularity as institutions look for new ways to hold and manage ETH. With billions already stored in these treasuries, Ethereum co-founder Vitalik Buterin and Fundstrat’s Tom Lee are closely monitoring this trend.
Both Buterin and Lee see great opportunities in Ethereum treasury companies, but they also highlight potential risks that could impact the ecosystem.
During a recent appearance on the Bankless podcast, Buterin expressed his support for the rise of Ethereum treasury companies. He believes that having multiple ways to hold ETH strengthens the ecosystem. However, he also cautioned against the dangers of overleveraging, which could lead to cascading liquidations and market instability. Despite these risks, Buterin believes that responsible players in the space can make these products stable and sustainable in the long run.
In a lighthearted moment, Buterin even joked about the US government being his favorite “treasury company” for its role in helping recover stolen Ethereum.
On the other hand, Tom Lee, the chairman of Bitmine Immersion Technologies, is placing a big bet on Ethereum treasury companies. Bitmine currently holds nearly 3.7 million ETH, valued at over $16 billion. Lee believes that Ethereum has unique advantages over Bitcoin when it comes to treasury management, such as the ability to earn staking yield and its active role in financial infrastructure.
Buterin also reflected on Ethereum’s growth, from a small college project to a global platform that has surpassed his initial expectations. He mentioned key milestones that surprised him, such as the 2016 DAO hack and hard fork, the rapid rise of DeFi and NFTs, and the progress of zero-knowledge proofs (ZKPs).
Looking ahead, Buterin envisions privacy as a standard feature in Ethereum wallets, making it easier for users to keep their balances and transactions private. He believes that tools like Privacy Pools can enhance privacy while preventing illegal activities, surpassing traditional finance standards.
When comparing Ethereum to Bitcoin, Buterin sees mutual respect between developers but differences in ideas. He describes Ethereum as a teenager on the verge of maturity, while Bitcoin is still in the early stages of development.
Overall, Vitalik Buterin views the growth of Ethereum and the adoption of treasury companies as positive signs for the ecosystem. He emphasizes the importance of responsible use and enhanced privacy features to ensure the long-term sustainability of Ethereum.