Ethereum as a Corporate Asset: Companies Embrace the Second Largest Digital Currency

Ethereum’s Rise as a Corporate Asset and Its Market Performance

While Bitcoin has taken center stage as a digital asset for many companies, a new trend indicates growing interest in Ethereum (ETH) among corporate treasurers. An increasing number of firms, primarily smaller ones in the crypto world, are acquiring Ethereum as a way to gain exposure to the technological infrastructure behind decentralized finance and digital assets. One larger player that already holds Ethereum is Coinbase Global, the parent company of the Coinbase trading network, which holds over $440 million in Ethereum assets. When Coinbase announced in a 2021 blog post that it would become the first publicly traded company to hold Ethereum and other assets, in addition to Bitcoin, it stated: “We believe that in the future, more and more companies will hold crypto assets on their balance sheet.” Ethereum has surged 50% over the past month and is hovering near its highest level since January, although it has yet to reclaim its 2021 high north of $4,600.

The Technological Potential: Beyond Currency

Ethereum allows developers to write programs or contracts that run entirely on its blockchain or network. It currently leads as the dominant infrastructure that enables businesses and consumers to transact directly with each other without banks, holding a market share of over 51%. Ray Youssef, CEO of crypto marketplace NoOnes, described tokenization as Ethereum’s “killer app.” According to him, “Ethereum lets anyone — whether it’s a crypto project, a factory, an artist, an influencer — create their own token and thus their own community and incentivize communities with an economy basically.” He even added that “You could argue it has more utility than bitcoin.” This utility is why firms like BitMine Immersion Technologies and SharpLink Gaming have increasingly been raising capital to buy ETH, similar to how MicroStrategy and a slew of other companies have added Bitcoin to their balance sheets in recent months.

Volatility Challenges and Political Influences

As with any crypto asset, the approach of adding Ethereum to corporate balance sheets carries risks due to volatile prices. Ethereum prices tumbled in April when President Trump’s “Liberation Day” tariffs announcement roiled markets. However, Ethereum’s returns have not been as high as those offered by Bitcoin: Ethereum’s year-to-date return stands at just 14%, compared to Bitcoin’s 26%. Despite this, companies continue to express confidence. Crypto miner BitMine Immersion Technologies, for example, recently announced that it holds over $1 billion in Ethereum, or roughly 300,000 tokens. The company, which went public on June 5, has positioned itself as a pure-play on Ethereum, betting that owning it is akin to owning the underlying infrastructure behind the convergence of crypto and financial services. BitMine CEO Jonathan Bates noted that “Acquiring $1 billion of ETH is a clear signal of our conviction in ethereum’s long-term value.”

More Companies Join the Trend and the Role of the GENIUS Act

Other companies like gaming and sports betting firm SharpLink Gaming and blockchain tech firm BTCS have pursued similar treasury strategies. Their shares are up more than 100% and 130%, respectively, over the past month. Earlier this month, computing firm Bit Digital even announced that it had shifted its entire treasury from Bitcoin to Ethereum. Sam Tabar, CEO of Bit Digital, stated in a press release: “We believe Ethereum has the ability to rewrite the entire financial system.” Ethereum’s surge coincides with the GENIUS Act, landmark legislation signed by President Trump last Friday. The new law regulates stablecoins, digital tokens backed by assets like the US dollar and short-term treasuries. Optimism over stablecoin adoption has sent shares of issuer Circle up more than 500% since its IPO on June 5, with its USD Coins (USDC) running on the Ethereum network.

Ethereum vs. Bitcoin: Complementary or Competing Strategies?

Gautam Chhugani, an analyst at Bernstein, asked: “If real companies and institutional investors are innovating on the blockchain, doesn’t that make blockchain networks, and by implication, blockchain network assets (e.g ETH) valuable?” He emphasized that any company using stablecoin technology pays transaction fees to the Ethereum network. However, not all companies see the same value in Ethereum as they do in Bitcoin. For example, when asked directly whether MicroStrategy would add ETH to its holdings, executive chairman Michael Saylor stated in an interview with The Street: “MicroStrategy wouldn’t because MicroStrategy is 150% Bitcoin. We do Bitcoin, we’re 150% Bitcoin. We’re going to be Bitcoin. And the only thing I like more than Bitcoin is more Bitcoin.” Sean Farrell, head of digital asset strategy at Fundstrat, noted that this movement should not be misinterpreted as Ethereum replacing Bitcoin as the investment of choice for companies, but rather as an “adjacent strategy.” According to him, “I don’t want people to misconstrue this movement from treasury companies to be viewed [as] ETH is replacing bitcoin. It’s just blockchain technology applied in a different way for a different use case. These companies are just capitalizing on the real world asset [tokenization] trends.”