- Vitalik supports corporate ETH holdings but cautions against leverage risks
- ETH treasury firms now collectively hold almost $12 billion
- Ethereum founder warns overleveraging could trigger cascading liquidations
Ethereum co-founder Vitalik Buterin has expressed support for corporate treasury strategies involving ETH holdings while issuing cautionary warnings about excessive leverage that could threaten the cryptocurrency’s stability.
Speaking with Bankless, Buterin described corporate ETH treasuries as “good and valuable” while emphasizing the importance of responsible financial practices.
Buterin highlighted the benefits of providing investors with diverse access vehicles to ETH exposure beyond direct token ownership. He noted that treasury companies serve people in different financial circumstances who require specific formats and properties for their cryptocurrency participation.
$12 Billion Treasury Market Led by Major Holdings
The ETH corporate treasury market has reached $11.77 billion in total value, with BitMine Immersion Technologies leading holdings at 833,100 ETH worth approximately $3.2 billion.
This position ranks BitMine as the fourth-largest cryptocurrency holder among all public companies regardless of digital asset type.
SharpLink Gaming maintains the second-largest ETH treasury with $2 billion in holdings, followed by The Ether Machine at $1.34 billion.
The Ethereum Foundation and PulseChain round out the top five corporate ETH holders, creating a concentrated but growing institutional ownership base.
These treasury strategies mirror Strategy’s Bitcoin accumulation model, where companies use corporate balance sheets to build cryptocurrency reserves.
The approach provides institutional exposure to ETH while potentially benefiting from long-term price appreciation and ecosystem growth.
Leverage Risks Could Create Systemic Vulnerabilities
Buterin expressed specific concerns about overleveraging scenarios that could trigger catastrophic market events.
He cautioned that a 30% collapse in the price of ETH might trigger liquidations that result in a 50% reduction, which could lead to 70% or 90% losses if treasury corporations become overly leveraged.
Such liquidation cascades would compound with credibility loss, creating systemic risks for the broader Ethereum ecosystem. Buterin’s scenario envisions overleveraged treasury positions amplifying market volatility rather than providing stability through long-term holding strategies.
The Ethereum founder distinguished current treasury participants from speculative traders, describing them as “responsible people” rather than reckless investors.
This assessment suggests confidence in current market participants’ risk management practices while acknowledging potential future risks.
Market Performance Shows Volatility
ETH has experienced mixed performance throughout 2025, falling from approximately $3,685 in January to a low of $1,400 in April before recovering.
The price movements show how corporate treasuries must balance potential upside with downside protection when structuring their ETH holdings. Companies using borrowed funds or margin arrangements face particular risks during market downturns.
Buterin’s warnings about leverage come as more companies explore cryptocurrency treasury strategies following regulatory clarity and institutional adoption trends. The growing market creates both opportunities and systemic risks that require careful management.
Derivatives and Access Vehicles Provide Market Benefits
Despite leverage concerns, Buterin supports ETH derivatives and treasury vehicles that expand access to Ethereum exposure. He views these financial products as “fundamentally fine and stable” when used responsibly without excessive leverage.
Different investor types require various formats for cryptocurrency participation based on regulatory requirements, tax considerations, and operational constraints. Corporate treasuries and ETF structures address these diverse needs while expanding ETH’s institutional adoption.
The social coordination aspect of corporate ETH ownership creates network effects that could benefit the broader Ethereum ecosystem through increased stakeholder alignment. Companies with ETH treasuries have incentives to support Ethereum development and adoption.
Buterin’s balanced perspective acknowledges both benefits and risks of corporate ETH treasury adoption. The key factor determining positive versus negative outcomes appears to be leverage discipline among treasury companies.
The Ethereum founder’s comments suggest optimism about current market participants while establishing clear guidelines for sustainable growth. Avoiding overleveraged positions becomes crucial for maintaining market stability as treasury adoption expands.
