Standard Chartered Favors Ethereum Treasury Firms Over Spot ETFs

Standard Chartered has stirred the Ethereum investment landscape by backing Ethereum treasury firms over traditional U.S. spot ETFs. Geoff Kendrick, Head of Digital Assets Research at the global bank, says firms like SharpLink Gaming (SBET) now offer a more appealing route for ETH exposure.

Kendrick’s comments come amid rising volatility in Ethereum ETFs and the rapid accumulation of ETH by publicly traded companies, signaling a possible shift in institutional strategies.

Treasury Firms vs. ETFs: The Emerging Choice

In a recent statement to BeInCrypto, Kendrick emphasized that Ethereum treasury firms—public companies that hold ETH on their balance sheets—are becoming a better investment option than Ethereum spot ETFs listed in the U.S.

He noted that over the past two months, these firms have accumulated about 1.6% of Ethereum’s total circulating supply—on par with spot ETFs over the same period. Kendrick also pointed out that the net asset value (NAV) multiples of such firms are beginning to normalize, with companies like SharpLink Gaming trading just above a NAV multiple of 1.0.

“I see no reason for the NAV multiple to go below 1.0,” Kendrick said. “These firms offer regulatory arbitrage for investors. Given current multiples, ETH treasury companies are a better asset to buy than spot ETFs.”

The NAV multiple measures how the company’s market cap compares to the value of ETH it holds. A multiple above 1.0 suggests the market values additional benefits such as staking rewards, future ETH growth, and operational leverage.

The Rise of ETH Treasury Companies

Treasury firms began emerging in stealth mode earlier this year and have rapidly expanded their holdings. Standard Chartered estimates these companies have collectively amassed over 2 million ETH, with projections suggesting they could add up to 10 million ETH in the coming months.

In July alone, these companies purchased 545,000 ETH—worth around $1.6 billion. SharpLink Gaming reportedly led the charge, adding 50,000 ETH and bringing its total to over 255,000 ETH.

Other key players in this space include BitMine Immersion Technologies, Bit Digital, and Coinbase. In total, 12 public companies now hold more than 1 million ETH, accounting for approximately 0.83% of the total ETH supply, according to CoinGecko data.

Spot Ethereum ETFs Face Mixed Signals

While Ethereum treasury firms gain ground, U.S.-based Ethereum spot ETFs have experienced a rollercoaster month. After seeing record inflows of $5.4 billion in July, ETFs faced sharp pullbacks at the beginning of August.

• On August 1, net outflows totaled $152 million.

• On August 4, ETFs saw their worst single-day outflows ever, losing $465 million, with BlackRock’s ETHA fund accounting for $375 million of that.

The market saw a modest rebound on August 5 with $73 million in net inflows, again led by BlackRock, while Grayscale’s ETH funds saw continued redemptions.

Despite these swings, there are structural improvements in the ETF space. The SEC recently approved in-kind creation and redemption mechanisms for crypto ETFs, allowing them to operate more like traditional commodity ETFs, enhancing investor confidence.

Why Institutions Are Pivoting Toward Treasury Firms

Kendrick’s endorsement of Ethereum treasury firms reflects broader institutional sentiment. Unlike ETFs, which track ETH passively, treasury firms offer direct exposure to the ETH price, along with staking benefits that increase ETH per share over time.

These firms may also enjoy regulatory flexibility. As U.S. regulators continue to grapple with crypto oversight, publicly traded companies operating under broader corporate laws may find easier paths to accumulate and manage ETH.

This “regulatory arbitrage” presents a unique advantage over ETFs, which face tighter restrictions under securities law.

Investor Focus Turns to SharpLink’s Earnings

All eyes will be on SharpLink Gaming’s Q2 earnings report, scheduled for August 15. Kendrick believes this could be a pivotal moment for Ethereum treasury firms, potentially validating them as a serious institutional-grade asset class.

If SBET demonstrates strong ETH-based returns and operational performance, more investors may pivot from ETFs toward direct stock exposure in ETH-holding firms.

Conclusion: A New Phase in ETH Investment Strategy

Standard Chartered’s support for Ethereum treasury firms signals a possible turning point in the crypto investment landscape. While ETFs have been a major on-ramp for institutions, the rise of ETH-holding public companies offers a new, potentially more lucrative path.

With NAV multiples stabilizing and staking rewards accruing, Ethereum treasury firms may be better suited for investors seeking long-term exposure and returns. As the crypto market matures, the competition between ETFs and equity-based crypto vehicles could reshape how institutions engage with Ethereum—and possibly the entire digital asset class.

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