Source: cryptoslate
Compiled by: Blockchain Knight
Standard Chartered Bank stated that even when the second-largest cryptocurrency, Ethereum, surged to a historic high of $4,955 on August 25, the valuation of Ethereum and the companies holding its treasury remains undervalued.
The bank's cryptocurrency research director, Geoffrey Kendrick, stated that since June, treasury companies and ETFs have absorbed nearly 5% of circulating Ethereum, with treasury companies buying 2.6% and ETFs increasing their holdings by 2.3%.
The combined holding ratio of both is 4.9%, which is considered one of the fastest accumulation periods in cryptocurrency history, surpassing the speed of a 2% increase in circulating supply by BTC treasury and ETF by the end of 2024.
Kendrick indicated that the recent accumulation frenzy marks the early stages of a broader accumulation cycle. In his July report, he predicted that treasury companies could ultimately control 10% of circulating Ethereum.
Kendrick believes that, given that companies like BitMINE have publicly set a 5% holding target, this target seems achievable. He noted that this means there is still 7.4% of the circulating supply to be accumulated, which will provide strong support for Ethereum's price.
The rapid accumulation pace highlights the increasingly important role of institutional players in the cryptocurrency market. Kendrick stated that the synergy between ETF capital flows and treasury accumulations forms a 'feedback loop' that could further tighten supply and drive prices higher.
Kendrick raised the bank's previous forecast, stating that Ethereum could climb to $7,500 by the end of the year. He also mentioned that the current pullback is an 'excellent entry point' for investors to prepare for subsequent inflows.
Although buying pressure has pushed up Ethereum's price, the valuation of companies holding Ethereum has shown a reverse movement.
SharpLink and BitMINE are two of the most mature Ethereum treasury companies, with their net asset value (NAV) multiples already lower than those of the largest Bitcoin treasury company, Strategy.
Kendrick stated that this valuation discount is unreasonable, as Ethereum treasury companies can earn a 3% staking yield, while the Bitcoin held by Strategy does not generate such returns.
He also mentioned that SBET plans to buy back shares when its NAV multiple falls below 1.0, which he called a 'solid bottom' for the valuation of Ethereum treasury companies.
