Why are companies turning to Ethereum treasuries?

Source Cryptopolitan

Several companies are placing bets on treasury strategies that involve Ethereum (ETH), as more institutions take up positions on the world’s second-largest crypto. ETH was trading up 2% on the day at $2,624 at the time of writing, having failed to break past the $2,600 resistance level late last week.

Ethereum has gone up over 7% in the past week and is up 2.8% intraday. According to market analysts, even with institutional involvement, the asset is still trading within a tight range, locked in a sideways channel that has persisted for two months.

Speaking on CNBC’s Squawk Box, Ethereum co-founder Joe Lubin recently said corporate interest in Ethereum is climbing because they want to “tell the Ethereum story.” 

“What does Wall Street pay attention to? It pays attention to being able to make money,” he reckoned.

GameSquare holdings commences $100 Million ETH treasury plan

According to a July 8 press statement, GameSquare Holdings announced the launch of an ETH-based treasury strategy, against the backdrop of a partnership with crypto capital management firm Dialectic. 

The news took the company’s stock 0.57% upwards of its Tuesday closing session price, now changing hands at $1.54, according to Google Finance data.

GameSquare’s Board has approved a total ETH allocation of up to $100 million, which will be deployed in stages while providing liquidity for ongoing operations.

The ETH-focused treasury is built on Dialectic’s proprietary Medici platform, which integrates machine learning, automated optimization, and risk management systems. GameSquare is targeting annual yields of 8-14%, well above the current staking benchmarks of 3-4%.

To help fund the Ether acquisitions, GameSquare launched a public offering of over 8.4 million shares at $0.95 per share to raise approximately $8 million. The offering was filed under a registration statement declared effective by the SEC on June 4 and is expected to close by July 9.

SharpLink acquires over $533 million in ETH

Another Media and Sports betting technology company, SharpLink Gaming, disclosed on Tuesday that it now holds 205,634 ETH, valued at more than $533 million, bought between June 28 and July 4. 

During that period, SharpLink purchased 7,689 ETH for over $19 million at an average price of $2,501 per token.

As reported by Cryptopolitan, SharpLink’s stock rallied 7% after announcing a $30 million Ether purchase on June 25, bringing its holdings to 188,000 ETH. The company has committed all of its Ether holdings to staking and restaking protocols, earning 322 ETH in rewards, worth roughly $848,750, since June 2.

SharpLink raised $64 million in net proceeds to fund the ETH investments, by selling more than 5.4 million shares. In May, it filed plans to sell up to $1 billion in common stock, with the bulk of the proceeds earmarked for more ETH acquisitions.

Lubin, who is SharpLink’s chairman, said the strategy is rooted in financial discipline and transparency. “Our sustained success is a direct result of SharpLink’s disciplined execution of its ETH-centric treasury management strategy,” he remarked. 

Lubin explained that adding ETH to corporate treasuries helps to reduce excess Ether supply and could eventually create positive price pressure.

Bit Digital goes all-in on Ethereum

Meanwhile, earlier this week, Nasdaq-listed Bit Digital has completely exited its Bitcoin holdings in favor of Ethereum. The company sold all of its BTC assets, raising $172 million in the process, and used the funds to acquire more than 100,000 ETH. 

After buying Ethereum, Bit Digital is reportedly one of the largest corporate Ethereum treasury firms globally.

“We believe Ethereum has the ability to rewrite the entire financial system.” CEO Sam Tabar told reporters earlier this week. “We are starting with exposure to over 100K ETH for now, but we intend to aggressively add more so we become the preeminent ETH holding company in the world.”

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