Crypto Treasury Companies Explode Bitcoin and Ethereum Higher

The race is on for Ethereum treasury companies to buy up ether and replicate the same strategy that helped Michael Saylor stack more than $27 billion in paper profits by betting on Bitcoin.

The exact same playbook has already helped Ethereum advance nearly 20% this week to crack $3,000 for the first time since February — and if you ask the minds behind the new treasury companies, there are no signs of that trend slowing anytime soon.

Ethereum co-founder Joe Lubin at Sharplink Gaming, Wall Street legend Tom Lee who is now Chairman at Bitmine Immersion Technologies, and Bit Digital CEO Sam Tabar constitute what has become a triumvirate of a new ethereum-sucking machine. In fact, Bit Digital even went as far as selling all of their Bitcoin this week to convert into a full Ethereum treasury company, while also raising $174 million to acquire more ether.

"We sold all our Bitcoin and we did this raise. I actually personally participated in that raise myself with my own savings," Tabar explained to CNBC this week. Bit Digital shares are trading about 82% higher since that raise, which is a win for him and Tether co-founder Brock Pierce who also participated in the round, according to SEC filings.

"We're just getting started. We're just getting warmed up," Tabar said. And if you think about how Saylor has been able to loop his share issuances to scoop up an underlying asset, only to see it rise and then have the ability to repeat the process. And after Ethereum's 20% surge this week, it's hard to say Tabar is wrong.

"There are a lots of financial engineering tools you can use in the capital markets," Tabar said on the Unchained podcast about copying Saylor's Bitcoin buys. "I understand I shouldn't be so proud to say I'm copying his playbook, but I am. I'm not gonna lie."

Assuming the playbook is executed as well as it has been for Bitcoin, it's not unexpected to start seeing Ethereum march to new all-time highs as well. According to Tom Lee, $10,000 is more likely.

“The reason I [think] Ethereum, you know, is attractive, in my opinion, is that it is the layer one blockchain where real world assets are becoming tokenized,” Tom Lee told Coinage last week. “As more things in the financial world and real world become tokenized, then financial institutions like Goldman and JPMorgan and Amazon, Walmart, as they do stablecoins, are also going to want to stake Ethereum itself. So we're essentially doing the underlying architecture of what will be what other businesses will actually do.”

Some of those companies, however, may very well be waiting for official sign off from Congress. That could come next week as the GENIUS stablecoin bill is expected to head to the House for a final vote to reach the final step in becoming law. Until then, the new crop of Ethereum treasury companies seem to be doing their part to provide cover. Joe Lubin, who leads Sharplink Gaming, the leading ETH treasury company very clearly laid things out in a new interview with CNBC.

"We still have a lot of ether out there and not enough activity to sop it up," he said. "Not only is it a great business to run, but it's going to be critical to enable the supply dynamics to right size as we build more and more applications."

On Friday, the Ethereum Foundation also revealed it offloaded about $25 million in ether using Sharplink as a counter-party in that transaction to fund ongoing operations. The transaction, which was completed at about $2,572 per ETH was the first over-the-counter deal between the Ethereum Foundation and a publicly traded company. It also prevented a massive Ethereum sale from hitting the open market.

As these moves continue, it will be interesting to see what kind of purchases are announced next week, and if Strategy gets back to buying after their recent $4 billion raise. Equally interesting will be to watch how shares in the ETH treasury companies continue to trade. As Tom Lee explained, part of the appeal of running one is that they usually trade at a consistent premium to the underlying Ethereum or Bitcoin they hold.

But wild swings usually occur as shared get registered for sale. Sharplink for example saw its stock re-trace by about 90% before settling back down. This week shares rose 64%. Bitmine shares may still have some settling to do, after giving up 60% this week and trading lower again on Friday.

Of course, publicly traded ETH treasury companies aren't the only game in town. Coinage, for example, as a community-owned cooperative has been running for three years with its treasury in Ethereum. And while we may not have as much as the others, we do let all of our members own equal portions of the treasury. That means fewer shenanigans and "financial engineering" that could eventually see shareholders of the public companies diluted as volatility continues.

If you'd like to join Coinage on our journey — feel free to mint a membership to send your ETH into the Coop treasury and become a member today!

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