In a significant shift in institutional cryptocurrency investment strategy, Standard Chartered’s Head of Digital Assets Research, Geoff Kendrick, suggests that publicly listed companies holding Ethereum (ETH) as part of their treasury are now a more compelling investment than traditional US spot Ethereum Exchange-Traded Funds (ETFs). This perspective challenges conventional thinking, offering a fresh angle on gaining exposure to the second-largest cryptocurrency.
The Case for Corporate Ethereum Treasuries
Kendrick’s analysis, shared exclusively with BeInCrypto, highlights a critical convergence: since early June, Ethereum treasury firms and spot ETFs have accumulated ETH at comparable rates, each acquiring approximately 1,6% of ETH’s circulating supply. However, the true differentiator lies in their Net Asset Value (NAV) multiples.
For companies like SharpLink Gaming (NASDAQ: SBET), a pioneer in this space and one of the largest ETH holders, the NAV multiple – the market capitalization divided by the value of the ETH it holds – has stabilized close to 1,0. Kendrick argues there’s little reason for this multiple to fall below par, making these firms an attractive entry point.
Beyond favorable valuations, corporate ETH treasuries offer distinct advantages:
- Regulatory Arbitrage: They provide investors with a different regulatory pathway to ETH exposure compared to regulated ETF products.
- Direct Price Upside: Shareholders gain direct exposure to Ethereum’s price appreciation.
- Staking Rewards: Many of these firms actively stake their ETH, generating additional yield that can enhance shareholder value.
SharpLink Gaming, for instance, has amassed over 255,000 ETH, contributing to the more than 2 million ETH accumulated by treasury firms quietly this year. Standard Chartered projects this figure could swell by another 10 million ETH. Publicly traded companies now collectively own 0,83% of the total ETH supply, a figure that includes major players like BitMine Immersion Technologies, Coinbase, and Bit Digital.
Turbulent Waters for Spot Ethereum ETFs
Kendrick’s endorsement of treasury firms comes amidst a volatile period for US spot Ethereum ETFs. While July saw robust inflows of 5,4 billion $, early August presented a stark contrast. The first week of August witnessed significant net outflows, including a record-breaking 465 million $ on August 4, largely driven by BlackRock’s ETHA.
Despite these reversals, the ETF landscape is evolving. The late July approval by the SEC for “in-kind” creation and redemption mechanisms means crypto ETFs can now operate more efficiently, akin to traditional commodity ETFs, by directly exchanging ETH for ETF shares.
A New Horizon for Ethereum Investment
The contrasting performance and inherent structures of corporate ETH treasuries versus spot ETFs underscore a maturing digital asset market. Standard Chartered’s view suggests that for the discerning investor, firms like SharpLink Gaming – which will release its Q2 earnings on August 15 – represent a high-efficiency alternative. Their ability to offer direct ETH exposure, potential staking yields, and regulatory flexibility positions them as a compelling institutional-grade asset class in the ever-expanding world of cryptocurrency investment.
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