Vitalik Sounds the Alarm: Could Ethereum’s $10B Treasury Boom Trigger the Next Big Crash?

According to latest industry reports, Ethereum co-founder Vitalik Buterin has voiced his support for Ethereum treasury firms, recognizing their growing role in bringing Ethereum to more people. Speaking on the Bankless podcast, he said that these firms offer valuable options for investors who don’t want to hold ETH directly.

However, without mincing words, he also sounded a note of warning that unchecked leverage in these treasuries could be a problem, and if ETH drops sharply, it could trigger a cascade of liquidations.

Spiking Reserves: Over $10 Billion of ETH Accumulated

Institutional ETH accumulation has surged exponentially this year. Reports claim that the Strategic ETH Reserve now has over $10 billion of ETH held by corporate treasuries, up by 4,900% since April. That’s over 2.7 million ETH across dozens of entities.

Big holders including BitMine Immersion, SharpLink Gaming and others are making calculated plays through staking and treasury management.

Based on reports, BitMine Immersion has become the largest public ETH holder, accumulating over 833,000 ETH (worth around $3 billion) in just over a month. Their strategy has gotten high-profile support from Peter Thiel and Cathie Wood and has led to a 480% stock gain year-to-date.

Meanwhile, SharpLink Gaming has quietly built out a treasury of nearly $2 billion in ETH and is actively earning staking rewards, proving that treasury models go beyond just holding.

Buterin’s Cautionary Note: Avoid the Overleveraged Trap

Buterin supported the rise of Ethereum treasury firms, saying they offer valuable services and “more options” for financial flexibility. But then he tempered that with a warning.

“If you woke me up three years from now and told me that treasuries led to the downfall of ETH… my guess… is that they turned into an overleveraged game,” he said.

He contrasted this with the Terra collapse, reassuring that “these are not Do Kwon followers” and that Ethereum participants are more disciplined.

Institutional Momentum Meets Prudent Discipline

The surge in Ethereum treasury accumulation is mirrored by rising institutional inflows, including ETFs and strategic staking models. BTC’s Wall Street playbook is being applied to ETH but analysts are advising caution.

Firms like GameSquare and BTCS are using active yield strategies with DeFi instruments while keeping leverage caps conservative. This measured approach means Ethereum treasury firms are prudent, not speculative outliers.

Galaxy Digital’s Mike Novogratz recently said the treasury boom is stabilizing. Institutional ETH exposure has grown fast but Novogratz notes that new entrants may struggle to stand out in a crowded market. Still he’s optimistic that existing treasury firms can bring new participants into crypto.

Conclusion

Based on the latest research, Vitalik Buterin might just be right that Ethereum treasury firms are good for adoption and institutional ETH participation, but must be prudent. With over $10 billion in ETH on corporate balance sheets, this is no small feat.

However, unchecked leverage can turn strategic assets into systemic risk. The future of Ethereum treasury firms will be determined by their ability to balance accessibility and financial responsibility in a maturing market.

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Summary

Institutional activity around ETH is hot at the moment. Ethereum co-founder Vitalik Buterin acknoledges treasury firms for expanding access but warns against too much leverage. Corporate treasuries now hold more than $10 billion in ETH, with BitMine Immersion and SharpLink leading the way in strategic accumulation.

FAQs

What role do Ethereum treasury firms play?

They allow investors to get indirect exposure to ETH through company shares and institutional participation beyond traditional markets.

How much ETH do they hold?

More than $10 billion worth, over 2% of ETH’s supply, since early 2025.

Why is leverage a problem?

Overleveraged positions can lead to cascading liquidations during price drops and destabilize both firms and ETH’s market.

Are these treasuries speculative?

Not necessarily. Many are long term strategic holding, staking for yield and DeFi participation with measured risk.

Is this trend sustainable?

Institutional momentum is strong but market observers say growth may stabilize without new structural innovation or demand.

Glossary

Ethereum treasury firms – Public companies that hold Ethereum as part of their reserves.

Overleveraged game – A scenario where debt amplifies risk during market downturns.

Strategic ETH Reserve – A tracker of corporate Ethereum holdings.

Staking yield – Earnings from staking ETH on the network.

Treasure accumulation – The act of accumulating and holding ETH as collateral or reserves.

Sources

Cointelegraph
Cryptotimes.io

Beincrypto
Investopedia

Thecurrencyanalytics
Ainvest
Businessinsider