Buterin explains that leveraged strategies from companies could generate a cascade of liquidations, potentially causing Ethereum to lose 90% of its value.
Vitalik Buterin talking about Ethereum treasury companies to the Bankless channel. Source: Reproduction.
Ethereum (ETH) reached $4,000 this Friday (8), its highest price since December 2024. In addition to following Bitcoin's strong appreciation, the rise of ETH is also linked to its purchase by several companies.
However, Vitalik Buterin, founder of Ethereum, expressed concern about this business model.
Although he believes this is positive for its coin, the developer points out that high leverage could generate a reverse effect in the long term, causing a drop of up to 90%.
Ethereum reaches yearly high but faces strong resistance in the $4,000 region.
While Bitcoin continues to break new highs, Ethereum remains far from its ATH of $4,900 recorded in 2021, four years ago. Despite this, ETH reached $4,000 this Friday (8) for the first time since December 2024, showing strength.
As can be seen in the graph below, the region has strong resistance. This is because bulls have failed to break it three times in 2024.
Ethereum reaches $4,000 for the first time in 2025, but the region has strong resistance. Source: TradingView.
Therefore, given that ETH fell 66% between December and April, a breakout from this range would be essential to maintain investor optimism. If this happens, Ethereum may jump to $4,900 in search of a new all-time high.
Companies and ETFs are behind the rise of Ethereum.
The Ethereum network has seen little use for over a year, and its fees are as low as 1 gwei. Therefore, investments by companies and inflows via ETFs explain the rise.
The main highlights are SharpLink Gaming, currently with 521,939 ETH in cash, valued at R$ 11.3 billion, and BitMine with 833,000 ETH, valued at R$ 18 billion.
Recently, Ethereum ETFs hit record inflows, another point that shows institutional demand for the second largest cryptocurrency in the market.
Ethereum ETFs started to see large inflows in July for the first time since they were launched. Source: SoSoValue.
Vitalik Buterin says treasury companies are good for Ethereum, but they could kill its coin.
Ethereum completed 10 years on July 30. In an interview with Bankless, the creator of the second largest cryptocurrency in the market discussed the current challenges and opportunities.
“The social aspect of coordinating around ETH being just an asset that companies can have as part of their treasury is good and valuable.”
“Providing different vehicles for people to access ETH is, in my opinion, one of the reasons why people are buying shares of companies with treasury in ETH instead of just holding ETH directly, which is also a positive thing,” explained Buterin.
Despite his optimism, the developer expressed concern about possible leveraged strategies. In his view, this could cause Ethereum to lose 90% of its value in the event of a cascade of liquidations.
“If I were woken up three years from now saying that treasury companies led to ETH's decline, my assumption would be that they became a super-leveraged game and, at some point, a 30% drop led to forced liquidations, causing a drop of 50%, then 70% and 90%, which ended up being aggravated by a loss of credibility.”
In conclusion, Buterin notes that these people are not “followers of Do Kwon,” founder of the defunct Terra (LUNA). Therefore, he hopes that this does not happen.
Are ETH Treasuries good for Ethereum? @VitalikButerin thinks they can be:
“ETH just being an asset that companies can have as part of their treasury is good and valuable… giving people more options is good.”
But he also issues a warning:
“If you woke me up 3 years from now… pic.twitter.com/W55oUD7Lke
— Bankless (@BanklessHQ) August 7, 2025