Amid the cryptocurrency crash, Ethereum Treasury Companies are struggling. While ETHZilla is selling off large amounts of ETH, Bitmine continues to buy. Let’s take a closer look.
ETHZilla Sells Over 24,000 ETH
Ever since the explosion of Digital Assets Treasuries (DAT) launches, we have expressed doubts about the viability of many of these initiatives. Today, the market is beginning to stabilize, and several players who were only there to cash in on a passing trend are already backtracking on their promises.
This is particularly true of ETHZilla, which had already begun selling part of its ETH last October to finance its share buybacks.
On Monday, the company continued this trend 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.
Moreover, this sale is accompanied by several updates, both regarding its transparency policy and its business model:
Going forward, the Company believes its value will be primarily driven by revenue growth and cash flows from its RWA tokenization business. Consequently, effective immediately, we are discontinuing the display of the mNAV dashboard on our website, but we will continue to publish regular updates to our balance sheet. We will also continue to report any significant changes to 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 a metric 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, all for a market capitalization of $119.3 million.
On the stock market, the stock has been heavily punished, losing more than 96% since its August high and even falling below the level prior to the announcement of the adoption of an Ethereum Treasury Company model:
ETHZ daily stock price
Bitmine Stands Its Ground
While ETHZilla is shifting away from a trend to focus on the tokenization of real-world assets—another buzzword—the leader of the Ethereum Treasury Company, Bitmine, continues its purchases. In fact, the company led by Tom Lee officially announced on Monday the acquisition of 98,852 ETH last week.
Currently, its cryptocurrency holdings 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 the price of Ethereum stands at $2,965 at the time of writing—down 2.7% over the past 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.
