tl;dr
Geoffrey Kendrick from Standard Chartered argues that investing in Ethereum treasury companies is more attractive than buying ETH ETFs. ETH treasuries offer better value with NAV multiples just above 1, increased ETH concentration per share, and access to staking rewards, enhancing returns. Signific...
Buying shares in Ethereum treasuries offers a more compelling investment compared to purchasing ETH exchange-traded funds (ETFs), according to digital assets researcher Geoffrey Kendrick from Standard Chartered. In a recent analysis, Kendrick highlighted that treasuries provide better value as the net asset value (NAV) per share in these treasury companies has normalized and now exceeds that of ETH ETFs.
Kendrick explained that with NAV multiples just above 1, ETH treasury companies present a better opportunity for investors looking for exposure to Ethereum's price gains, as well as access to staking rewards. These treasuries increase ETH concentration per share, enhancing investor returns through both price appreciation and the yield generated by staking.
This observation comes amidst the rapid growth of ETH treasuries and considerable asset inflows into nine ETH funds recently launched. Noteworthy examples include SharpLink (SBET) and BitMine Immersion, which have amassed $1.9 billion and nearly $3 billion in ETH holdings, respectively, shortly after initiating their strategies.
ETH ETFs, approved last year, enable investors to gain exposure to Ethereum through stock exchange-traded shares. However, treasury companies have begun acquiring ETH themselves, hoping investors will prefer buying these shares instead. Ethereum's staking mechanism incentivizes holders to lock tokens in the network in exchange for additional ETH, adding another layer of potential returns for treasury shareholders.
Kendrick also emphasized that ETH treasury companies have become more significant in terms of asset inflows compared to their Bitcoin counterparts. Since June, these entities have purchased about 1% of the total ETH supply. This mirrors the strategy popularized by MicroStrategy, which started investing heavily in Bitcoin in 2020 to boost its stock price. MicroStrategy now owns over 628,000 BTC valued at more than $72 billion and raises capital through debt issuance to buy more cryptocurrency, offering shareholders indirect crypto exposure via its stock.
At the time of this analysis, Ethereum traded near $3,675 per coin, experiencing a slight one-and-a-half percent decline over the past week, yet boasting a strong 46% gain within the last 30 days. This robust performance, combined with the staking potential and favorable NAV multiples, strengthens the case for investing in ETH treasuries over conventional ETH ETFs.