Ethereum co-founder Vitalik Buterin said he supports public companies holding Ether, but he warned the trend could create danger if it becomes overleveraged.
He made the remarks in an interview released on the Bankless podcast on Thursday, 7th August.
Buterin said wider corporate ownership helps bring more investors to ETH. He also stated that the practice must be managed carefully to prevent a cascade of forced sales that could harm the token.
Why does he support Treasuries?
Buterin argued that companies keeping the $ETH token on their balance sheets give people more ways to own the token. That, he said, adds value, and he sees no problem with firms adding ETH as a treasury asset, provided they act responsibly.
“If you woke me up three years from now and told me that treasuries led to the downfall of ETH, then, of course, my guess for why would basically be that somehow they turned it into an overleveraged game”, he stated.
He framed his support as conditional. If firms treat ETH like a normal reserve asset and avoid risky borrowing against it, the arrangement can be healthy.
The worry about Leverage
Buterin sketched a worst-case scenario, if many firms borrowed against their ETH and prices fell, margin calls could force quick liquidations. Those forced sales could push the price down further.
Ethereum Co-Founder mentioned it might turn treasuries into an unstable, overextended game. He said that scenario would harm ETH’s credibility and could cause a sharp price crash.
Buterin said he doubts the current holders will repeat past mistakes tied to reckless leverage.
A comparison
He made a point about past failures in crypto, and he mentioned the collapse of the Terra network and its co-founder as an example of what can go wrong when leverage and poor risk controls mix.
He used that example to stress discipline, but he said the firms holding ETH now are different. He expects them to be more cautious and better run, which, he said, lowers the odds of a systemic failure.
ETH’s Treasury holding & price actions
The market for public companies that hold Ether has grown to $11.77 billion. Leading that pack are BitMine Immersion Technologies and SharpLink Gaming.
BitMine holds 833,100 ETH which is worth about $3.2 billion today, putting the firm fourth among public companies that own any cryptocurrency. These holdings show that corporates are taking ETH seriously as a treasury option.
Ether has had a volatile run, it started the year near $3,685. It fell to a low of $1,470 on April 9. The token has since recovered and is trading at $3,913.47, up 5.85% in the last 24 hours.
These moves show both upside and downside for holders. They also underline why risk controls matter if companies put large sums of treasury capital into ETH.
How could this play out?
If firms keep ETH but avoid heavy borrowing, the market may absorb the demand without major stress. If many use the asset as collateral for loans, stress tests will matter.
Sudden price drops could then trigger a chain reaction. That chain reaction could start with margin calls, move to forced sales, and end with a sharp price fall. Firms and regulators may watch that risk more closely now.
Companies should disclose their treasury strategies, and investors should ask about borrowing and risk limits. Clear policies on when to sell or hedge would reduce surprise moves. Transparency will help markets judge the real level of risk tied to corporate ETH holdings.
Also Read: Ethereum Co-Founder Vitalik Highlights Its 10-Year Record of Zero Downtime as $ETH Reclaims $3,900