Corporate funds are flocking to Ethereum... Buterin warns 'excessive leverage could lead to collapse'

Global corporations are increasingly adopting Ethereum (ETH) as a strategic asset, and Vitalik Buterin, Ethereum's co-founder, has issued a warning that 'excessive leverage could threaten the Ethereum ecosystem.'

According to BeInCrypto, a cryptocurrency-focused media outlet, Buterin assessed corporate accumulation of Ethereum positively, but also pointed out structural risk factors. Previously, several companies, including US-listed Fundamental Global, had announced plans to acquire hundreds of millions of dollars worth of Ethereum.

Appearing recently on the 'Bankless' podcast, Buterin stated, 'It is positive that companies are accumulating Ethereum and expanding ecosystem accessibility,' while also warning that 'if accompanied by excessive leverage, it can result in problems.'

He remarked, 'If someone tells me that Ethereum has collapsed three years from now, the reason would probably be because companies took on too much leverage with ETH,' adding, 'If the price plummets, a chain reaction of forced liquidations could destabilize the entire market.'

However, he added that 'the financial participants in the Ethereum ecosystem are generally responsible,' and that 'they are different from the followers of Do Kwon during the Terra incident.'