Vitalik Buterin Endorses ETH Treasury Firms—But Drops a Reality Check on Risks

Ethereum's co-founder throws weight behind crypto treasury management—while sounding alarms on hidden pitfalls.

The Buterin Boost

Vitalik's stamp of approval sends ETH treasury firms moonward—until his caveat empties a few seats on the rocket.

Fine Print FUD

'Not your keys, not your crypto' meets Wall Street custodians. Spoiler: the suits still take a cut when things go sideways.

Cynical Take

Another 'institutional adoption' narrative for traders to front-run—just don't ask about the 0.5% management fees compounding quarterly.

ETH Treasury Firms Gain Popularity

Over the past year, Ethereum treasury companies have gained serious attention from both retail and institutional investors. These firms specialize in purchasing and holding large amounts of cryptocurrencies—mainly Bitcoin and Ethereum—on behalf of shareholders.

This model is gaining traction on Wall Street. Investors who want exposure to crypto without directly buying tokens themselves are increasingly turning to these companies. As of now, public firms holding Ethereum collectively manage nearly $12 billion in ETH.

Among the biggest holders:

• BitMine Immersion Technologies owns around 833,100 ETH, worth roughly $3.2 billion.

• SharpLink Gaming and The Ether Machine hold about $2 billion and $1.34 billion in ETH, respectively.

• The Ethereum Foundation and PulseChain round out the top five ETH-holding public entities.

This surge in institutional holdings comes as ETH is recovering strongly from earlier price declines.

Ethereum Price Recovers Strongly in 2025

Ethereum’s price has had a turbulent ride in 2025. Starting the year around $3,685, it dipped sharply to a low of $1,470 in early April. Since then, ETH has staged an impressive rebound, climbing over 160% to reach its current value of around $3,870.

This rally has helped Ethereum regain ground against competitors like bitcoin and Solana, with analysts crediting ETH treasury accumulation as one of the key drivers behind the rebound.

Overleverage Could Pose a Serious Threat

Despite his optimism, Buterin warned that ETH’s growing exposure through treasury firms could backfire if these companies rely too heavily on leverage.

He imagined a worst-case scenario where ETH’s price crashes, triggering a series of forced liquidations across treasury firms that borrowed against their ETH holdings. This kind of domino effect could lead to a collapse in price and damage Ethereum’s reputation.

“If you woke me up three years from now and told me that treasuries led to the downfall of ETH, my guess for why WOULD basically be that somehow they turned it into an overleveraged game,” Buterin said.

He emphasized the importance of managing risk carefully, especially in a financial environment where borrowed funds can quickly amplify losses.

Learning From the Past: Terra Collapse Mentioned

To highlight his point, Buterin referenced the 2022 collapse of Terra (LUNA), a major event in crypto history caused in part by irresponsible financial practices and overleverage.

“These are not Do Kwon followers that we’re talking about,” Buterin stated, suggesting that Ethereum-focused treasury firms and investors are more cautious and better informed than the parties involved in Terra’s downfall.

His comments reflect a balance between support for innovation and caution against repeating past mistakes in the crypto space.

Broader Adoption and Long-Term View

Buterin’s cautious endorsement comes at a time when broader institutional interest in Ethereum is growing. Public companies entering the ETH market are helping Ethereum reach new segments of traditional finance and investment portfolios.

At the same time, his concerns about leverage serve as a reminder that crypto markets—despite growing maturity—remain volatile and sensitive to financial instability.

The crypto community appears to be paying attention. Many investors and analysts are now calling for stricter internal policies among ETH-holding companies to limit risk exposure and ensure the long-term health of the Ethereum ecosystem.

Conclusion

Vitalik Buterin’s remarks strike a careful balance between embracing Ethereum’s institutional adoption and warning against the dangers of financial overreach. As public firms continue accumulating ETH, the crypto world watches closely to ensure growth doesn’t come at the cost of sustainability.

With Ethereum showing strong price performance in 2025 and treasury firms playing a key role in this momentum, the spotlight is now on how responsibly this trend will be managed. If done right, it could be a major milestone in ETH’s journey toward becoming a mainstream financial asset.