Ethereum co-founder Vitalik Buterin has warned that corporate treasuries holding large amounts of ETH could become a double-edged sword for the network.
Speaking on the Bankless podcast, he suggested that if companies borrow too aggressively against their Ethereum reserves, a sharp market downturn could trigger a chain of forced liquidations, potentially leading to catastrophic price declines.
Buterin described a worst-case scenario where a 30% drop snowballs into far deeper losses due to leveraged positions unwinding, eroding market confidence in the process.
Despite the caution, he acknowledged the positives of corporate ETH treasuries. According to Buterin, having organizations hold Ethereum not only strengthens its social and economic network but also provides investors with more ways to gain exposure beyond direct ownership. This variety, he said, caters to different financial needs and creates valuable new entry points into the ecosystem.
Ethereum’s momentum has been fueled by recent policy and market shifts. The GENIUS Act’s approval of a federal framework for stablecoins has reinforced Ethereum’s position as a core player in digital finance. At the same time, record inflows into ETH exchange-traded funds have signaled rising institutional appetite for the asset.
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Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
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