US Companies See Soaring Ethereum Purchases This Year

Corporate Holdings Surge More Than Eightfold From End of Last Year

"Balance of Blockchain-Based Staking, Price, and Reliability"

It has been found that some small and mid-sized US companies prefer Ethereum over Bitcoin as a hedge against inflation. These firms cite Ethereum’s ability to strike the right balance between affordable price and reliability, along with the advantage of blockchain-based staking.

On the 6th (local time), Reuters analyzed disclosures submitted to the U.S. Securities and Exchange Commission (SEC) and revealed that, as of the end of July, publicly traded companies in the US held at least 966,304 Ethereum tokens. The value totals approximately $3.5 billion. At the end of last year, the holdings stood at 116,000 tokens, meaning Ethereum held by these companies has surged more than eightfold within half a year.

Ethereum, the second-largest cryptocurrency by market capitalization after Bitcoin, experienced rising demand after the launch of an ETF last year.

Unlike Bitcoin and other coins, Ethereum offers a staking mechanism. Staking allows Ethereum holders to deposit tokens into the Ethereum network, earning about 3~4% ETH as rewards. The mechanism is similar to depositing money in a bank and earning interest.

Sam Tabar, CEO of Bit Digital, said, “Ethereum is large enough to be rated as institutional grade and still early enough in its adoption to offer growth potential.” He noted that his company has included Ethereum in its balance sheet.

Additionally, Ethereum fuels the Ethereum blockchain, supporting a wide variety of applications like lending platforms, trading protocols, and stablecoins, making it a key component of the crypto financial system. For this reason, Anthony Georgiades, Managing Partner at Innovating Capital, noted that “holding Ethereum may not only diversify asset portfolios but also lay the foundation for decentralized finance initiatives.”

Still, regulatory uncertainty and price volatility remain hurdles for companies considering digital assets.

Earlier this year, Bitmine and GameSquare—a gaming media network—disclosed their plans to accumulate Ethereum. Their stock prices soared by 3,679% and 123% respectively, signaling growing investor momentum around crypto assets.

However, analysts have cautioned against boundless optimism.

Dan Coatsworth, an investment analyst at AJ Bell, observed, “Stock reactions to crypto exposure have the telltale signs of meme trading.” Given their high volatility, these stocks may not be suitable for risk-averse firms.

Anuj Karnik, founder of Straitsburg, a Singapore-based financial advisory company, commented, “Most CFOs are unlikely to swap Ethereum for cash.” He added, “It’s best entrusted to the treasuries of 'tech-oriented' companies able to stomach the volatility and complexity.”

Typically, liquidity and predictability are priorities in corporate assets, so most companies view allocating crypto as an experimental ‘alternative’ asset allocation.

Recently, the US SEC has relaxed its stance on staking of digital assets, but regulatory specifics around staking practices remain under discussion. These include whether to tax staking rewards as income, how to treat staked tokens on balance sheets, and whether custody requirements apply to staking service providers.

Still, some companies are ramping up Ethereum investments using capital from stock sales or bond issuances—much like Michael Saylor’s strategy with Bitcoin.

Bitmine used the proceeds from selling $182 million of shares to Cathie Wood’s Ark Invest in July to buy Ethereum. Justin Kenna, CEO of GameSquare, also told Reuters in an interview that their company may sell shares to invest in Ethereum.

According to Coin Metrics, Ethereum was trading up 1.5% at $3,627 in US markets on this day, while Bitcoin rose 1.1% to $114,942.

By Jung-A Kim, contributing reporter kja@hankyung.com