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Ethereum-Focused Corporates Outpace US Spot ETFs, Says Standard Chartered
Standard Chartered has highlighted a notable trend in the cryptocurrency landscape, asserting that companies focused on Ethereum (ETH) are outperforming US spot exchange-traded funds (ETFs). This shift is largely attributed to these corporates offering superior yield opportunities and enhanced net asset value (NAV) multiples.
The Attractive Landscape of Ethereum Treasury Firms
According to analyst Geoffrey Kendrick, these firms have become a viable investment avenue for those looking to tap into ETH’s price appreciation, staking rewards, and benefits stemming from decentralised finance (DeFi). These are advantages that current US spot ETFs do not provide.
The attractiveness of these corporates lies in their improved NAV multiples—calculated by dividing their market capitalisation by the value of the ETH they hold—which have normalised above 1. This shift indicates that these firms are no longer overvalued, positioning them as more appealing investment options. Kendrick noted that this normalisation enables investors to better benefit from the potential rise in ETH prices through these entities.
A case study illustrating this trend is SharpLink Gaming (SBET), which is backed by ConsenSys and affiliated with Ethereum’s co-founder Joe Lubin. The NAV multiple of SharpLink has decreased from a peak of 2.5 to just above 1, reflecting better alignment between its market capitalisation and the actual value of the ETH it holds. Kendrick highlighted that this improved alignment makes treasury firms especially attractive alternatives, given their regulatory advantages.
Institutional Demand and Ethereum Accumulation
The evolving demand for ETH is underscored by the acquisition trends among ETH treasury firms and US ETFs, which collectively have obtained approximately 1.6% of the total ETH supply since June. This burgeoning demand from institutional investors indicates that ETH treasury firms are gaining significant traction in the market.
At the forefront in this space is BitMine Immersion Technologies (BMNR), which possesses nearly US$3 billion (AU$4.60 billion) in ETH and aims to own approximately 5% of all Ethereum in circulation. Following closely is SharpLink, which holds around US$1.9 billion (AU$2.91 billion) in ETH.
Kendrick has maintained Standard Chartered’s year-end ETH target at US$4,000 (AU$6,128), with the cryptocurrency currently trading at US$3,652 (AU$5,597), reflecting a 2% increase in the past day.
Looking Ahead
The outlook for Ethereum and its treasury firms is promising, with predictions of continued growth in institutional interest and accumulation. As the market evolves, these entities may provide unique opportunities for investors seeking to capitalise on the rising fortunes of Ethereum.
In summary, as Ethereum treasury firms showcase their potential through improved yields and normalised NAV multiples, they stand as compelling alternatives to traditional investments like US spot ETFs, particularly in the context of growing institutional demand.
