Ether

Spot Ethereum ETFs pulled in US$704m inflows last Wednesday – eight times the inflows into spot Bitcoin ETFs and the third consecutive day that ETH funds outpaced BTC funds. Leading the charge? BlackRock’s iShares Ethereum Trust ($ETHA), with US$15B in net assets.

It’s a trend that began in July with ETH outperforming BTC. The ETH/BTC ratio now sits above its 365-day moving average, signalling a big shift in capital flows. 

See, crypto’s two biggest names play very different roles: one’s built to be money, while the other’s built to do things with money. Bitcoin’s a decentralised way to store and move value, but Ethereum’s like the internet’s app store. Developers can build everything from games to financial tools on its network. 

So, is Ethereum finally ready to step out from Bitcoin’s shadow? 

According to Ethereum’s cofounder Joseph Lubin, ETH is better for balance sheets because ‘it’s a productive and yielding asset.’ Lubin also chairs the notoriously volatile SharpLink Gaming ($SBET), which holds 729,000 ETH, worth roughly US$3.2b.

SBET isn’t even the largest corporate holder of ETH. That title belongs to BitMine Immersion ($BMNR), which holds 1.52 million ETH, worth US$6.6b and has ambitions to raise US$20b to fund more ETH purchases – all to acquire 5% of ETH’s total supply. 

Then there’s The Ether Machine, that’s already acquired US$1.5b worth of ETH and expects to go public in Q4 via a SPAC merger with Dynamix ($DYNX).

We knew companies were stacking Bitcoin at an alarming pace. But a lesser known fact is that there’s 71 entities holding over 100 ETH – and 17 of them are publicly traded firms.

One thing that sets apart ETH treasury companies from ETFs is yield. The U.S. Securities and Exchange Commission (SEC) is yet to greenlight a staking feature for spot ETH ETFs. But treasury firms? They’re free to stake ETH holdings on-chain and participate in all things decentralised finance (DeFi).

In DeFi, ETH holders can ‘stake’ funds in smart contracts to earn rewards. It’s similar to earning interest at a bank, only it's run by code instead of people. But it’s not without risk. SBET recognised a US$87.8m impairment loss on liquid staked ETH in Q2. 

Still, the decentralised economy is booming. There’s US$154b locked in protocols, and Ethereum accounts for 61% of that value. 

For companies, holding ETH isn’t just a price play, but exposure to a parallel financial system. But as ETH-treasury stocks heat up, remember: holdingETH isn’t the same as building ETH. Hype can drive valuations, but sooner or later the market demands utility over narrative.

This is not financial advice nor a recommendation to invest in the securities listed. The information presented is intended to be of a factual nature only. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking financial, legal and taxation advice before investing.