Standard Chartered Predicts Ethereum Treasuries to Outshine Bitcoin and Solana

Standard Chartered has released a report suggesting that Ethereum treasuries are poised to outperform those of Bitcoin and Solana. The banking giant's analysis indicates that upcoming market consolidation, driven by falling valuations of digital asset treasuries (DATs), will favor Ethereum due to its staking yield capabilities and more established treasury ecosystem.

Key Takeaways

• Ethereum treasuries are expected to benefit more from digital asset treasury (DAT) flows than Bitcoin or Solana.

• Falling market-to-net asset value (mNAV) ratios for DATs will likely lead to market differentiation and consolidation.

• Staking yields are a key advantage for Ethereum and Solana treasuries over Bitcoin.

• Ethereum treasuries are considered more sustainable and established compared to Solana's.

The Rise of Digital Asset Treasuries

Digital asset treasuries, which are publicly listed companies holding cryptocurrencies on their balance sheets, have become significant players in the crypto market. These companies need to trade at a premium to their holdings (measured by mNAV) to raise capital and acquire more assets. However, recent declines in mNAVs have raised concerns about their sustainability and ability to continue buying digital assets.

Standard Chartered's research highlights that DATs currently hold substantial portions of major cryptocurrencies: 4% of Bitcoin, 3.1% of Ethereum, and 0.8% of Solana. The success or failure of these treasuries, therefore, has a considerable impact on token prices.

Factors Driving DAT Success

Geoffrey Kendrick, Standard Chartered's global head of digital assets research, identified three primary drivers for DAT success: the ability to secure funding cheaply, the size of the treasury, and the generation of yield. He noted that while both Ethereum and Solana treasuries can offer staking yields, which should command higher mNAVs than Bitcoin treasuries, Ethereum is better positioned.

This advantage stems from Ethereum treasuries being more established. In contrast, Solana treasuries face greater uncertainty, partly due to potential regulatory hurdles, such as Nasdaq potentially requiring shareholder approval for crypto purchases.

Market Shakeout and Consolidation

The report anticipates a shakeout in the DAT market, with consolidation likely, particularly among Bitcoin-focused firms. As some DATs trade below asset value, it may become more cost-effective for larger entities to acquire smaller competitors rather than buying assets directly. Such consolidation, however, would primarily involve rotating existing holdings within the ecosystem rather than creating new net demand.

Ethereum treasuries, such as Bitmine Immersion Technologies, are seen as more resilient. Bitmine, a leading ETH treasury, has continued its accumulation strategy, holding over 2 million ETH. This ongoing buying activity, supported by staking yields, positions Ethereum treasuries as a more positive driver for ETH compared to the headwinds faced by Bitcoin and Solana treasuries.

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, Yahoo Finance.

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

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

• Standard Chartered Backs Ethereum Treasuries, BeInCrypto.