Vitalik Buterin Backs Ethereum Treasury Firms—But Issues Stark Risk Warning

Ethereum co-founder Vitalik Buterin just threw weight behind treasury management projects building on ETH—with a side of sobering realism.

The Bull Case for On-Chain Treasuries

Buterin sees potential in DAOs and protocols using Ethereum-native tools for corporate finance functions. No more begging traditional banks for services when DeFi yields outperform their 0.01% APY 'high-yield' accounts.

The Fine Print

His endorsement came with razor-sharp caveats: smart contract risks, oracle failures, and the classic 'this isn't battle-tested at scale' disclaimer. Because when has crypto ever faced unintended consequences?

The Punchline

Treasury management remains the holy grail—every founder wants to ape Apple's $200B cash pile until they remember most protocols burn through runway faster than a VC's patience.

Crypto Treasury Firms on the Rise

Crypto treasury firms have been gaining traction among institutional investors, particularly in the purchase and holding of cryptocurrencies like Ether and Bitcoin. These companies act as intermediaries, holding large amounts of crypto assets for public companies, helping them avoid direct ownership.

The sector has now amassed significant holdings, with nearly $12 billion worth of Ether held by these treasury firms.

Are ETH Treasuries good for Ethereum?@VitalikButerin thinks they can be:

“ETH just being an asset that companies can have as part of their treasury is good and valuable… giving people more options is good.”

But he also issues a warning:

“If you woke me up 3 years from now… pic.twitter.com/W55oUD7Lke

— Bankless (@BanklessHQ) August 7, 2025

Leading the way are BitMine Immersion Technologies and SharpLink Gaming, which together hold billions in Ether. BitMine, for example, controls around 833,100 ETH, valued at $3.2 billion, ranking it among the largest crypto holders in the public sector.

Vitalik Buterin’s Caution on Overleveraging

While Buterin sees the expansion of Ether treasury firms as beneficial for increasing Ethereum’s reach, he warned that overleveraging could have dangerous consequences. He explained that excessive borrowing against Ether holdings might cause a harmful chain reaction if prices were to fall. In such a scenario, forced liquidations could lead to further price declines, eroding confidence in ETH’s value.

“If you woke me up three years from now and told me that treasuries led to the downfall of ETH, then, of course, my guess for why would basically be that somehow they turned it into an overleveraged game,” Buterin said. He referred to the collapse of Terra’s blockchain in 2022 as a cautionary tale about what could happen if investors become too reliant on Leveraged positions.

Despite his concerns, Buterin expressed confidence in the discipline of ETH investors. “These are not Do Kwon followers that we’re talking about,” he added, referring to the co-founder of the now-defunct Terra blockchain.

ETH’s Market Performance and Future Outlook

Ethereum has experienced a volatile year, seeing its price dip to $1,470 in April before rallying by more than 160% to its current value of around $3,870. The growth in ETH treasury firms has played a significant role in this surge, alongside broader market factors.

This resurgence has helped ethereum narrow the gap with Bitcoin and Solana, which have led the bull market in 2025.

The rise of these crypto treasury companies appears to be a key factor driving interest in Ether. The trend of public companies holding large amounts of ETH demonstrates increasing institutional interest in the token, despite some of the inherent risks involved.