Ethereum treasuries are rapidly gaining ground in the cryptocurrency market, now controlling 3.5% of all Ether. In comparison, Bitcoin treasuries hold 3.4% of the total Bitcoin supply. This data, reported by Blockworks Research, reflects a significant change in the investment landscape, especially considering that Ethereum treasuries have tripled their holdings since July, while Bitcoin treasuries have remained relatively stagnant.
Max Shannon, a senior research associate at Bitwise, commented on the situation, noting that the trend of Ethereum treasuries outpacing Bitcoin is expected to continue in the short term. A treasury company typically holds cryptocurrency such as Bitcoin or Ethereum as a reserve asset on its balance sheet. Recent months have seen a notable rise in companies diversifying their cryptocurrency portfolios beyond Bitcoin, with Solana treasuries also experiencing significant growth — jumping to 2.3% of the Solana supply from virtually zero in late April.
The acceleration of Ethereum treasuries is particularly striking; they have risen from just 1% of the Ether supply in August to 3.5%. Notably, this swift increase is something that took Bitcoin treasuries over five years to achieve. For context, MicroStrategy, now known as Strategy, began acquiring Bitcoin in August 2020 and has since amassed a worth of approximately $71 billion.
Currently, 71 firms collectively hold around $22 billion in Ether, according to Strategic ETH Reserve data. In contrast, the Bitcoin sector is significantly larger, with around 184 public firms owning more than 1 million Bitcoin, valued at roughly $116 billion.
One key factor driving Ethereum’s ascendance among treasury companies is its ability to generate yield. Ether allows for compounding returns through staking and DeFi activities like trading and lending. In contrast, Bitcoin does not offer the same native yield, limiting treasury strategies to merely buying and holding.
The differences in supply dynamics between the two cryptocurrencies contribute to Ethereum’s growing appeal. Bitcoin’s hard cap of 21 million coins creates scarcity, which can lead to limitations on how much a firm can accumulate. Conversely, Ethereum has no such cap, allowing for continuous issuance of new Ether. This lack of a supply ceiling means that treasury companies can perpetually add to their holdings, promoting the potential for indefinite growth.
The current trends also reflect broader institutional adoption of Ethereum. Various industry leaders, including VanEck CEO Jan van Eck, have even referred to Ethereum as “the Wall Street token.” The rationale behind this characterization lies in the booming stablecoin market, of which more than half operates on the Ethereum network.
Analysts predict that the stablecoin sector could exceed $500 billion by 2026, meaning financial institutions could increasingly rely on Ethereum’s blockchain for operations involving stablecoins.
However, experts caution that while Ethereum treasuries are currently outpacing their Bitcoin counterparts, this trend is not guaranteed to last. Shannon pointed out that Bitcoin will likely remain the foundational asset for balance sheets in the long run. The concept of “fiscal dominance” plays a role in this discussion, indicating a scenario where government deficits necessitate central bank interventions, potentially positioning Bitcoin as a protective asset against inflation.
As the cryptocurrency market continues to evolve, the competition between Ethereum and Bitcoin treasuries will be closely watched, particularly as institutional investors reassess their strategies in light of changing market conditions.