Is the recent ETH plunge a buying opportunity or a sign of worse to come? Standard Chartered’s Geoff Kendrick seems to think it’s the former, arguing that both ETH and ETH treasury companies are undervalued.
ETH Treasury Companies: A Deep Dive
Since June, ETH treasury companies have accumulated a significant 2.6% of all ETH in circulation. When combined with the influx from exchange-traded funds (ETFs), a staggering 4.9% of all ETH has been absorbed.
The Bullish Case for ETH
Kendrick believes this is just the beginning. His previous estimate suggested these companies could ultimately hold 10% of all circulating ETH. This aggressive accumulation, combined with strong ETF inflows, could be a powerful driver of future price appreciation. Despite the recent price drop, Kendrick remains bullish on ETH, sticking to his year-end target of $7,500.
Valuation of ETH Treasury Companies
The mNAV multiples (market capitalization relative to the value of crypto holdings) for companies like Sharplink Gaming and Bitmine Immersion have declined, falling below that of Michael Saylor’s MicroStrategy (MSTR). Kendrick finds this discrepancy puzzling, especially given that ETH treasury companies can generate staking yield of around 3%, while MSTR captures no such yield. The recent announcement by SBET to repurchase stock if its NAV multiple falls below 1.0 also provides a potential safety net for ETH treasury company valuations.
ETF Inflows Remain Strong
Even during market downturns, investors seem to be maintaining their confidence in ETH. Recent data shows substantial inflows into ETH ETFs, particularly BlackRock’s iShares Ethereum Trust (ETHA), suggesting continued institutional interest in the asset.
The Future of ETH and Treasury Companies
The convergence of institutional adoption, staking yields, and the strategic accumulation of ETH by treasury companies paints a compelling picture. However, the market remains volatile, and the future price of ETH is uncertain. While Kendrick’s analysis offers a bullish perspective, investors should conduct their own due diligence before making any investment decisions. What are your thoughts? Share your opinions in the comments below.
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