Institutional Investment Accelerates the Golden Era of Ethereum

A strong capital flow is surging from traditional finance towards Ethereum. Following Bitcoin being regarded as "digital gold" and becoming a regular on the balance sheets of some companies, Ethereum, with its unique profitability and ecosystem value, is rapidly becoming seen as "digital oil" in the eyes of institutional investors, opening a new chapter in corporate strategic reserves.

As traditional mining companies transition to emerging tech firms, a "arms race" around Ethereum has already begun.

"Ethereum Machine" Emerges

Recently, a new company created by early Ethereum builders and seasoned finance professionals announced that it will go public on NASDAQ by merging with a blank check company.

According to the announcement, the company plans to hold over 400,000 Ether at the time of its listing, with a total value exceeding $1.5 billion. This huge amount of funds comes primarily from two parts:

• First, the company's co-founder and chairman invested approximately $645 million as a cornerstone investment;

• Secondly, it has secured over $800 million in common stock financing from multiple top-tier crypto-native and institutional investors.

Unlike companies that simply imitate and hoard Bitcoin, this company positions itself as more than just a passive asset holder. It defines itself as an "active ETH generation company" aimed at providing investors with safe, compliant, and transparent ETH-denominated returns through specialized operations. Its core strategies include:

• Staking and Re-staking: Utilize its large ETH reserves to participate in the security validation of the Ethereum network, thereby earning stable staking rewards.

• DeFi Strategy: Participate in well-tested DeFi protocols for additional treasury yield, under the premise of strict risk assessment.

• Ecosystem Catalysis and Infrastructure Development: The company plans to actively support Ethereum native projects and provide institutional solutions for validator management, block construction, and other infrastructure solutions, deeply integrating and promoting the development of the Ethereum ecosystem.

The core team of the company is known as the "Ethereum Avengers".

The chairman is an early core member of a well-known blockchain company, having led the creation of the world's largest open-source blockchain alliance and promoted ETH to surpass a trading price of 1 USD in 2015. The CEO previously handled corporate development at a blockchain company, leading over 700 million USD in financing and multiple strategic investments. The Chief Technology Officer has extensive experience in Ethereum staking and blockchain infrastructure, having been responsible for developing early institutional-grade staking platforms and enterprise blockchain projects. The head of DeFi is an expert in the DeFi and Ethereum infrastructure fields, having provided advice to several top DeFi protocols and accumulated over a decade of quantitative research experience in traditional financial institutions. Additionally, the vice chairman has over 20 years of investment management experience, having worked at several well-known investment firms, and currently serves as a director at a large payment company.

The chairman candidly stated in an interview: "The biggest beneficiary of a certain U.S. bill is Ethereum, as 90% of RWA and stablecoins are deployed on Ethereum, just like 90% of searches in the market happen on a certain mainstream search engine, while other search engines only hold a small share. Ethereum is a productive asset, unlike Bitcoin, as it can generate intrinsic returns through staking."

Rise of the Titans: Major Listed Companies Compete to Increase Holdings in Ethereum

In fact, the emergence of this company is not an isolated case; it is precisely a microcosm of the current surging trend on Wall Street. Several publicly listed companies in the U.S. have already taken action, incorporating Ethereum into their core balance sheets, and their stock prices have experienced significant fluctuations as a result. Companies are competing to buy ETH, aiming to outdo each other in reserve quantities, and the winner can claim the title of "Ethereum version of MicroStrategy."

• A certain iGaming company: As a Nasdaq-listed iGaming company, it launched an Ethereum reserve strategy through a private placement of $425 million, holding approximately 358,000 ETH, with a market value exceeding $1.2 billion, accounting for 44% of its total market value. Driven by the co-founder of Ethereum, the company has almost fully staked its ETH to earn rewards.

• A certain mining infrastructure company: As a Bitcoin mining infrastructure company, it recently announced the launch of a "light asset" Ethereum reserve strategy. The company raised $250 million through a private placement on July 8, and the value of the Ethereum and Ethereum equivalents it currently holds has exceeded $1.12 billion. In addition, a well-known strategist from Wall Street has been appointed as the chairman of its board, and he publicly stated that the company will become the "MicroStrategy of Ethereum" and predicts that ETH will break through $4,000 in the short term, potentially reaching $10,000 to $15,000 by the end of the year.

• A certain cryptocurrency mining company: This company, which originally focused on Bitcoin mining, has recently completed an aggressive strategic transformation. The company announced that it has fully transitioned to Ethereum, having raised approximately $172 million through an IPO, and liquidated its Bitcoin holdings, using all proceeds to increase its holdings of Ether. This move has caused its total ETH holdings to soar to over 120,000 coins. The company's CEO referred to Ethereum as "a blue-chip asset reshaping the financial system."

• A certain digital media and gaming company: This company has also joined the battle, announcing the launch of an Ethereum reserve plan worth up to $250 million, and has completed its first batch of purchases. To continue increasing its investment, the company also plans to raise $70 million through a rights issue, specifically for purchasing ETH.

• A certain blockchain concept stock company: As one of the earliest blockchain concept stocks on NASDAQ, the company has been deeply involved in the Ethereum ecosystem since 2021. Recently, the company disclosed that its ETH and cash market value has reached $242 million, and announced plans to raise an additional $100 million for continued purchases of ETH. What makes it unique is that the company has adopted a hybrid financing model, not only through traditional equity financing but also innovatively utilizing a certain DeFi protocol for on-chain lending, accelerating the accumulation of ETH through leverage.

Innovative Financing Paths and Potential Risks

The financing methods adopted by these companies for purchasing Ether also reflect a high degree of financial innovation, but they also come with significant risks.

In addition to traditional private placements (PIPE) and market price issuances (ATM), there have been more aggressive strategies emerging in the market. For example, one company directly sold its Bitcoin reserves in exchange for Ether; another company innovatively utilized DeFi protocols to borrow stablecoins by collateralizing assets to purchase more Ether, achieving on-chain leverage.

The narrative of "ETH Micro Strategy" has undoubtedly become a powerful catalyst for stock prices. Relevant company stocks have experienced several-fold or even ten-fold surges in a short period. However, this announcement-driven increase is extremely fragile. Taking certain companies as examples, they all experienced severe pullbacks of over 70% shortly after reaching historical highs. This indicates that market sentiment is highly unstable and heavily speculative. In addition, holding reserve Ether also carries the following risk exposures:

• Price risk: The company's balance sheet is highly tied to the ETH price. Once the market enters a bear market, the asset value will significantly shrink.

• Financing risk: Highly dependent on continuous equity financing. If the market turns cold, financing channels may dry up, and the rights of existing shareholders may be continuously diluted.

• On-chain risks: Participating in staking and DeFi can bring returns, but it also introduces a series of blockchain-native risks such as smart contract vulnerabilities, node penalties, and oracle failures.

• Valuation bubble: The market capitalization of many companies far exceeds the net asset value of their held Ether, creating a significant premium. This premium can be maintained during market euphoria but may be quickly wiped out during periods of calm or in a bear market.

Who will become the "Ethereum version of MicroStrategy"?

Despite the surge, no company has yet emerged to become an "Ethereum whale" with absolute leadership and market pricing power like a certain company in the Bitcoin space. The reason lies in the higher strategic threshold and more complex narrative of ETH.

Simply "buy and hold" is not enough to encompass its potential; effectively staking, participating in DeFi, and managing on-chain risks require deeper technical and operational capabilities.

Currently, companies represented by multiple firms, with their strong founding teams and clear strategies, have the greatest potential to become leaders in the field. However, they are still in the early stages and need time to prove the sustainability of their strategies and risk management capabilities.

There is no doubt that the "Institutional Era" of Ethereum has arrived. From "digital oil" to "internet bonds", Wall Street is assigning new value labels to Ethereum. This wave of reserves led by publicly listed companies not only injects massive funds into the market but, more importantly, is reshaping the perception and positioning of Ethereum in the global capital market.

However, investors must remain clear-headed: this is a high-risk, high-reward game. While chasing this feast of cryptocurrency and stock linkage, one must also be wary of the enormous volatility and deep risks lurking behind it. Although the path for Ethereum towards a trillion-dollar network has become clearer, it is destined to be a thorny road filled with opportunities and challenges.