Vitalik Buterin Weighs In on Ethereum Treasuries Amid ETF Boom

Vitalik Buterin, co-founder of Ethereum, recently shared his thoughts on the growing trend of public companies adding ETH to their balance sheets. Speaking on the Bankless podcast, he said these firms help grow Ethereum’s ecosystem but also come with both benefits and risks.

He also talked about the fast growth of Ethereum Exchange-Traded Funds (ETFs). His remarks come at a time when institutional interest in ETH is breaking new records, signaling a major shift in how traditional finance views the asset.

Understanding Ethereum Treasuries

On the podcast, Buterin joked that the U.S. government is his favorite treasury company because of the times when authorities have stepped in to recover stolen Ethereum. 

While making light of the subject, he stressed that treasury holdings provide more options for investors, which is generally a good thing for Ethereum’s adoption.

Treasuries are businesses that choose to hold part of their corporate reserves in any crypto assets like Ethereum. 

This gives investors an indirect way to gain exposure to digital coin without buying the asset directly. The industry leader welcomed this development, saying that having different ways for people to access ETH makes the network stronger.

Vitalik Buterin Warns Against the Risk of Over-Leverage

Despite recognizing the benefits, Buterin also cautioned against potential risks. He warned that treasuries could become dangerous if firms depend too much on leverage. In his words, if Ethereum were ever to collapse because of treasuries, it would likely be due to companies turning into an “over-leveraged game.”

However, he also expressed confidence in the Ethereum ecosystem, describing the institutions and community members involved as responsible people. In his view, this responsibility reduces the chance of treasuries destabilizing the network.

Ethereum ETFs Show Strong Institutional Demand

As Buterin spoke about the role of treasuries, Ethereum ETFs hit new records in global markets. Last week alone, they gained $2.85 billion in net inflows, with trading volume rising above $17 billion.

On Monday, spot Ethereum ETFs recorded their largest single-day inflows to date, totaling $1.01 billion. In the first half of August alone, these funds have attracted more than $3 billion, making it the second-best month on record for Ethereum ETFs.

BlackRock’s iShares Ethereum ETF has played a leading role in this trend. On August 14, it recorded an inflow of $519 million, followed by another $338 million on August 15. By the end of July, BlackRock had already gathered $11.4 billion worth of Ethereum within just a few weeks.

Ethereum ETFs saw a small net outflow of $59 million this week. Still, BlackRock kept buying, showing strong confidence in ETH despite market ups and downs.