Standard Chartered Predicts Ethereum to Outshine Bitcoin and Solana in Treasury Race

Standard Chartered has issued a bullish outlook on Ethereum, predicting that its treasuries will outperform those of Bitcoin and Solana. The banking giant's research suggests that Ethereum's unique characteristics, particularly its staking yields and established institutional positioning, will drive its dominance in the digital asset treasury (DAT) sector.

Key Takeaways

• Standard Chartered believes Ethereum treasuries are best positioned for sustainability and growth.

• Staking yields give Ethereum and Solana an advantage over Bitcoin treasuries.

• Market saturation and potential consolidation loom for Bitcoin-focused DATs.

• Ethereum DATs are expected to be a stronger price driver for ETH compared to BTC and SOL.

Ethereum's Advantage in the Treasury Market

Geoffrey Kendrick, Standard Chartered's global head of digital assets research, highlighted that Ethereum treasuries are likely to benefit more from the growing trend of companies holding digital assets on their balance sheets. This is primarily due to Ethereum's proof-of-stake mechanism, which allows for staking yields. These yields can directly enhance a company's market-to-net asset value (mNAV), a crucial metric for sustainability in the DAT space.

Kendrick noted that while Solana also offers staking yields, Ethereum's treasuries are more established, giving ETH a relative advantage. In contrast, Bitcoin treasuries face challenges related to market saturation, with nearly 90 companies adopting similar models. This saturation could lead to consolidation, where larger players acquire smaller ones, resulting in coin rotation rather than new demand.

The Impact of Falling mNAVs

The digital asset treasury sector has recently faced pressure due to a significant drop in mNAVs. For DATs to continue accumulating assets, their mNAVs need to remain above 1. Falling below this threshold raises concerns about their sustainability and ability to raise funds. Standard Chartered anticipates this downturn will lead to differentiation within the sector, with success hinging on factors like access to low-cost funding, scale, and yield generation.

Market Implications and Key Players

Digital asset treasuries collectively hold substantial portions of major cryptocurrencies: approximately 4% of Bitcoin, 3.1% of Ethereum, and 0.8% of Solana. The health and activity of these treasuries, therefore, have significant implications for token prices. Standard Chartered's analysis suggests that Ethereum DATs are poised to provide a stronger tailwind for Ether prices compared to Bitcoin and Solana.

Companies like Bitmine Immersion Technologies, a prominent Ethereum treasury, are leading the charge. Bitmine holds over 2 million ETH, representing about 5% of the total supply, and continues to expand its holdings despite market pressures. This aggressive accumulation strategy, coupled with the inherent benefits of staking yields, positions Ethereum favorably in the evolving landscape of corporate digital asset holdings.

Sources

• Standard Chartered says Ethereum to benefit more from DAT buying than Bitcoin or Solana, The Block.

• Ethereum Treasuries Have 'Highest Probability of Being Sustainable': Standard Chartered, Decrypt.

• Stunning crypto treasury mNAV slide puts 4% of Bitcoin at risk as Ethereum remains strong, CryptoSlate.

• Ethereum Treasuries Set to Outperform Bitcoin and Solana as DAT Shakeout Looms: Standard Chartered —TradingView News, TradingView.

• Ethereum (ETH) Price: Why Standard Chartered Sees ETH Winning the Treasury Race, CoinCentral.