Institutionalizing Ethereum: How Treasury Companies Solve Wall Street’s Valuation Problem
By [Author Name/Source, if known] | July 31, 2025
Investment vehicles commonly referred to as Ether treasuries and holding companies have successfully addressed Ethereum’s appeal to traditional financial investors by packaging the digital asset in familiar structures, driving capital inflows and accelerating institutional adoption, according to Matt Hougan, Chief Investment Officer at Bitwise Asset Management.
Reframing Ether for Wall Street
Hougan told Cointelegraph that before investors utilized bank treasuries, “equity-wrapped” ETH, Ethereum struggled for a clear valuation story. He noted Wall Street had no definitive answer on why $ETH had value:
“The challenge ETH has had from a valuation perspective over the last couple of years, in my view, is that Wall Street didn’t have a clean answer to why it had value… Is it a store of value? Is it the burn mechanism? Is that revenue? Is it the yield on staking? Who knows?” – Matt Hougan, CIO, Bitwise Asset Management
Hougan explained that packaging $1 billion worth of ETH into a holdco (company) that stakes it, for instance, suddenly creates earnings visibility that appeals to traditional investors accustomed to corporate earnings reports.
Ethereum’s Evolution from Niche to Institutional
Increasing institutional interest underscores the evolution of the layer-1 smart contract blockchain from a niche internet community to an institutional-grade asset class, a decade after its mainnet launch in July 2015.
Related: Ethereum at 10: The Top Corporate ETH Holders as Wall Street Eyes Crypto
Potential Risks to the ETH Treasury Model
Hougan has also sounded cautionary notes about the model:
“The biggest risks are for these entities accumulating ETH to aggressively leverage themselves,” Hougan warned. “They need to carefully manage their own debt and interest expense and avoid overleveraging.”
For investors using ETH treasuries as inflation hedges, Hougan advised a long time horizon, noting short-term volatility could “crush” positions with lower timeframes. “If you’re thinking about using ETH or ETH-based instruments to hedge inflation, it requires a long time horizon,” he stated.
The analyst also pointed to basis risk—the risk that assets and liabilities denominated in different currencies could diverge negatively—as an issue. Major crypto market downturns could impact the ability of these holding companies to meet expenses. Specifically, prolonged periods of high volatility could challenge correlated revenue streams.
However, Hougan clarified that the risk of a “catastrophic unwind,” where ETH holding companies are forced to liquidate vast crypto holdings to cover maturing debt, remains low. The staggered maturity schedules of corporate debt make such a scenario unlikely:
“I think people’s image of a catastrophic unwind is wrong… A slow, partial unwind is what would actually happen,” according to Hougan.
Enter as Enterprise: TradFi is building Ethereum L2s to tokenize trillions in RWAs: Inside story
End of Article
