Ether outperforming bitcoin recently as companies adopt ether treasury strategies

Some crypto-focused companies are beginning to favor ether over bitcoin as an inflation hedge, citing a sweet spot between "affordability and credibility," as well as the potential to earn additional yield through staking, Reuters writes. Ether has outperformed bitcoin in recent weeks, but analysts caution that the trend may prove short-lived.

Corporate treasuries held at least 966,304 ether tokens on their balance sheets at the end of July, worth nearly $3.5 billion, according to a Reuters analysis of regulatory filings and disclosures. That compares with just under 116,000 at the end of 2024.

Specifically, Bitmine Immersion, a $3.5 billion-market-capitalization mining company, had increased its ether holdings to $2.9 billion as of early August. That makes it the largest corporate holder of ether in the world and the third-largest corporate holder of crypto overall, writes Icobench.com. Gaming media network GameSquare, which has a market capitalization of $85 million, has announced an ether treasury strategy, as noted by Business Insider.

Unlike bitcoin, which solely relies on price appreciation, ether can be used in staking, a practice where holders lock up their tokens to support the ethereum network in exchange for rewards, explains Reuters. Staking can offer yields of between 3% and 4%.

"Ether balances growth potential with the legitimacy of a blue-chip asset. It is large enough to be institutional-grade, yet early enough in adoption to benefit from future upside," said Sam Tabar, CEO of Bit Digital.

The ether cryptocurrency powers the ethereum blockchain, which supports a wide range of applications, including lending platforms, trading protocols, and stablecoins. This makes it a core component of the crypto financial system, explains Reuters.

"Holding ether is more like owning oil, whereas bitcoin is more one-dimensional, like gold. Ether is the foundation of decentralized finance, not just a pure store of value," argues Anthony Georgiades, general partner at VC firm Innovating Capital.

Even though the SEC is softening its stance on staking, the regulatory framework remains a work in progress, Reuters highlights. "Every staking reward could be landing in a compliance gray zone," warns Michael Ashley Schulman, partner and chief investment officer at Running Point Capital Advisors.

After BitMine and GameSquare reported interest in accumulating ether, their shares jumped 3,679% and 123%, respectively, Reuters notes. This underscores how eager investors are to chase crypto-linked momentum.

Analysts urge caution. "The share price response has the hallmarks of the meme craze," said Dan Coatsworth, investment analyst at AJ Bell.

The inherent volatility of crypto tokens also makes it a poor fit for boards with a low risk appetite.

"Most CFOs would not swap liquid cash for ether. It remains a niche tool best left to 'tech-forward' treasuries that can tolerate swings and complexity," said Anuj Karnik, founder and managing director at Straitsberg, a Singapore-based treasury advisory firm.

Ether's price is up 54% over the last month, compared to bitcoin's 10% increase, Business Insider highlights. 

According to Zack Shapiro, an attorney at the Bitcoin Policy Institute, there are several reasons for this. "I think a lot of it is that it's a speculation trade. Long term, we have to see."

In particular, since the GENIUS Act was passed, which regulates stablecoins, markets have been more enthusiastic about the asset class.

Institutional investors have joined in, launching new investment products. In recent weeks, BlackRock, Fidelity, and Grayscale began offering a spot ethereum ETF. According to the Block, the cumulative volume of spot Ethereum ETFs is $123.5 billion.

Still, Shapiro is not certain that the momentum will last. He believes much of the hype for the coin in recent weeks has to do with excitement and uncertainty over ethereum's potential catalysts. The crypto's rally could lose steam once more regulatory details are solidified, Shapiro says.

The AI translation of this story was reviewed by a human editor.