Faced with the decline of cryptocurrencies, Ethereum Treasury Companies are struggling. While ETHZilla is selling off large amounts of ETH, Bitmine is still buying. Let’s take a closer look.
ETHZilla sells more than 24,000 ETH
As soon as Digital Assets Treasuries (DAT) began to explode onto the scene, we expressed doubts about the viability of many of these initiatives. Today, the market is beginning to regulate itself, and several players who were only there to take advantage of a fad are already backtracking on their promises. This is particularly the case with ETHZilla, which had already begun selling part of its ETH last October to finance its share buybacks.
On Monday, the company continued this momentum by announcing the sale of 24,291 ETH for approximately $74.5 million to finance early redemptions of convertible bonds on December 24 and 30.
This sale is accompanied by a few updates, both in terms of its transparency policy and its business model:
Going forward, the Company believes that its value will be primarily driven by revenue and cash flow growth from its RWA tokenization business. As a result, we are discontinuing the mNAV dashboard on our website effective today, but will continue to publish regular updates to our balance sheet. We will also continue to report any significant changes in our ETH holdings and/or the number of shares held in our SEC filings and on our social media channels.
Regarding mNAV, it is important to note that this is an indicator that relates a company’s market capitalization to the value of its cryptocurrency holdings. In the case of ETHZilla, this mNAV is currently 0.70x, taking into account that it now holds 69,802 ETH worth $207 million, for a total market capitalization of $119.3 million.
The stock has been heavily penalized on the stock market, losing more than 96% since its August high and even falling below the level it was at before the announcement of the adoption of an Ethereum Treasury Company model:
Bitmine persists and signs
While ETHZilla is turning away from a trend to focus on the tokenization of real-world assets, another popular concept, Ethereum Treasury Company leader Bitmine continues its purchases. On Monday, the company led by Tom Lee formalized the acquisition of 98,852 ETH last week.
Its cryptocurrency holdings now consist of 4,066,062 ETH worth $1.2 billion, as well as 193 bitcoins worth $16.89 million.
In the announcement, Tom Lee reaffirmed the goal of acquiring 5% of the total ETH supply, while the company currently holds 3.37%.
While Ethereum is trading at $2,965 at the time of writing, down 2.7% over 24 hours and 40% from its all-time high, there is no doubt that other Ethereum Treasury Companies will face difficult times in the coming months.
