The current intensification of the development of crypto company treasuries raises the obvious question of their ability to offer attractive returns. Ethereum could emerge as a leading choice in this competitive environment.
Ethereum treasuries are “very attractive for investment”
The race for crypto company treasuries has clearly intensified since the beginning of the year, with a succession of announcements every day about new entrants or purchase procedures aimed at boosting the stocks of publicly traded companies already involved in this trend.
There are two main reasons for this new adoption of cryptocurrencies. The first is to trigger a rise in the shares concerned by riding the current trend towards institutional opening up of this digital economy. The second is to outperform the results of the crypto asset concerned by increasing the amount held per share.
This principle is summarized in the form of a multiple of the Net Asset Value (mNAV), which is now at the center of this equation in order to select the most promising projects. This is the method chosen by Standard Chartered investment bank analyst Geoffrey Kendrick to estimate the cash holdings dedicated to Ethereum as “very attractive for investment.”
According to his calculations, Ethereum companies currently hold 1.6% of the amount of Ether (ETH) in circulation, an amount presented as equivalent to the US spot Ethereum ETF market. However, the outlook is not the same at all.
Ethereum: Spot ETFs vs. corporate cash
According to the Standard Chartered analyst, the Net Asset Value (NAV) of the Ethereum corporate cash sector has “begun to normalize.” This stabilization is now above 1 and is not expected to decline in the near future.
I see no reason for the NAV multiple to fall below 1, as I believe these companies offer regulatory arbitrage opportunities for investors.
Geoffrey Kendrick
This reality clearly works against the US spot ETH market. Its inability to offer staking returns—and other leverage effects associated with decentralized finance (DeFi)—poses a serious competitive challenge to treasuries that are already raking in millions of dollars in rewards.
For Geoffrey Kendrick, the success of Ethereum treasuries is only just beginning, as they could eventually hold the equivalent of 10% of the amount of Ether (ETH) in circulation. Nevertheless, it seems important to point out that the possible imminent opening of the Ethereum spot ETF market to staking could significantly reshuffle the cards in this analysis.
