Sharplink Gaming CEO Warns of Risks in Yield-Chasing Ether Treasuries
Companies that aggressively pursue extra returns on their Ether holdings could be the most vulnerable in a market downturn, according to Sharplink Gaming co-CEO Joseph Chalom.
Earlier coverage: Joe Lubin predicts Ether could see a 100x surge as Wall Street shifts onto decentralized rails.
Speaking in an interview with Bankless on Monday, Chalom cautioned that late entrants to the Ether treasury space may attempt to compensate by chasing higher yields, which only increases their exposure.
“There will be people, just like in traditional finance, who want to squeeze out that last 100 basis points of yield and believe it’s risk-free,” Chalom said. While some strategies can deliver double-digit yields on Ether (ETH $4,327), he warned they are far from without consequences.
Such approaches, he explained, involve multiple layers of risk—including credit risk, counterparty risk, duration risk, and smart contract risk. He emphasized that firms attempting to make up lost ground by overextending themselves are especially at risk.
“I think the biggest risk,” Chalom concluded, “is that people who are far behind are going to take risks that I don’t think are prudent.”
Sharplink Gaming CEO Warns of Imprudent Practices in ETH Treasury Sector
Sharplink Gaming co-CEO Joseph Chalom cautioned that the Ether treasury sector risks being “tainted by people that do imprudent things,” particularly in how firms raise capital or seek to differentiate themselves through yield strategies.
He questioned the sustainability of such practices, asking: “If you overbuild and there is a downturn, how do you ensure your capital structure is designed around Ethereum’s highest price point?”
Sharplink Gaming currently stands as the second-largest public holder of Ether, with $3.6 billion worth in reserves, behind only BitMine Immersion Technologies, which holds $8.03 billion. In total, ETH treasury companies collectively hold around 3.6 million ETH, valued at approximately $15.46 billion, according to data from StrategicETHReserve.
The top 10 Ether treasury companies by holdings. Source: StrategicETHReserve
The rise of crypto treasury companies has drawn both optimism and caution from industry leaders. Josip Rupena, CEO of lending platform Milo and a former Goldman Sachs analyst, recently told Cointelegraph that the structure of Ether treasury firms carries risks similar to collateralized debt obligations (CDOs) and other securitized debt products that fueled the 2008 financial crisis.
By contrast, Matt Hougan, chief investment officer at Bitwise, argued that Ether treasury and holding companies are actually solving a critical challenge for Ethereum. By packaging ETH in a format traditional investors can understand, Hougan said these firms are helping attract more institutional capital and accelerating adoption.
Sharplink Gaming co-CEO Joseph Chalom struck a more balanced tone, noting that “the beautiful thing” about ETH treasury companies is their near-infinite scalability. At the time of writing, Ether (ETH) was trading at $4,327, according to CoinMarketCap.
Still, concerns about the broader crypto treasury model are mounting. James Check, lead analyst at Glassnode, cautioned in a July 5 X post that his “instinct is the Bitcoin (BTC) treasury strategy has a far shorter lifespan than most expect.” Similarly, on June 29, venture capital firm Breed predicted that only a handful of Bitcoin treasury firms will endure long term, warning that many could face a destructive “death spiral” if their market value trades too close to net asset value.