Ethereum Enters the Institutional Era: Emerging Companies Get on Board in a Capital Wave

Wall Street is experiencing a surge in investment in Ethereum. Following Bitcoin being regarded as "digital gold" and becoming an important part of the assets of some listed companies, Ethereum, with its unique profitability and ecosystem value, is rapidly becoming "digital oil" in the eyes of institutional investors, opening a new chapter in corporate strategic reserves.

As traditional mining enterprises transition to emerging tech companies, a "arms race" around Ethereum has already begun.

"Ethereum Machine" Emerges

Recently, a new company created by early builders of Ethereum and seasoned financial professionals announced that it will go public on Nasdaq through a merger with a special purpose acquisition company, with the stock code "ETHM".

According to the announcement, the company plans to hold over 400,000 Ether at the beginning of its listing, with a total value exceeding $1.5 billion. This enormous fund mainly comes from two parts:

• The co-founder and chairman of the company invested approximately $645 million in cornerstone investment;
• Secured over $800 million in common stock financing from several top crypto-native and institutional investors.

Unlike the previous simple imitation of some companies hoarding Bitcoin, this new company positions itself as far more than a passive asset holder. It defines itself as an "active ETH generation company" that aims to provide investors with secure, compliant, and transparent ETH-denominated returns through specialized operations. Its core strategies include:

• Staking and Re-staking: Participate in the security verification of the Ethereum network using its large ETH reserves to earn stable staking rewards.
• DeFi Strategy: Participate in well-established DeFi protocols after a thorough risk assessment to obtain additional treasury income.
• Ecosystem Catalysis and Infrastructure Construction: The company plans to actively support Ethereum native projects and provide infrastructure solutions such as validator management and block building for institutions, deeply integrating and promoting the development of the Ethereum ecosystem.

The company's core team lineup can be described as the "Ethereum Avengers." Team members include early blockchain alliance founders, business development experts, staking and infrastructure specialists, DeFi and quantitative research experts, as well as finance professionals with extensive investment management experience.

The chairman of the company stated in a media interview: "The biggest beneficiary of the recent stablecoin regulatory bill is Ethereum, as the vast majority of RWA and stablecoins are deployed on Ethereum. Ethereum is a productive asset, unlike Bitcoin, as it can generate intrinsic yields through staking."

Rise of the Titans: Major Listed Companies Compete to Increase Holdings in Ethereum

In fact, the emergence of this new company is not an isolated case; it is precisely a reflection of a surging new wave on Wall Street. Several publicly listed companies in the U.S. have already taken action, incorporating Ethereum into their core balance sheets, and their stock prices have experienced significant fluctuations as a result. Companies are competing to buy ETH, wanting to outdo each other in the amount they hold.

• A gaming company has initiated an Ethereum reserve strategy through a private placement of $425 million, holding approximately 358,000 ETH, with a market value exceeding $1.2 billion, accounting for 44% of its total market value. Driven by key figures in the Ethereum ecosystem, the company has almost fully staked its ETH to generate returns.

• A Bitcoin mining infrastructure company recently announced the launch of a "light asset" Ethereum reserve strategy. The company raised $250 million through a private placement on July 8, and currently holds Ethereum and Ethereum-equivalent assets valued at over $1.12 billion.

• A company that was originally focused on Bitcoin mining has recently completed an aggressive strategic transformation. The company announced that it has fully shifted to Ethereum, raising approximately $172 million through an IPO and liquidating its Bitcoin holdings, with all proceeds used to increase its Ethereum stake. This move has driven its total ETH holdings to over 120,000.

• A digital media and gaming company has also joined the fray, announcing the launch of an Ethereum reserve plan of up to $250 million, and has already completed its first purchases. To further increase its investment, the company also plans to raise $70 million through a share placement specifically for the purchase of ETH.

• As one of the earliest blockchain concept stocks on Nasdaq, a certain company has been deeply engaged in the Ethereum ecosystem since 2021. Recently, the company disclosed that its ETH and cash market value has reached $242 million and announced plans to raise another $100 million for continuous purchases of ETH. What sets it apart is that the company has adopted a hybrid financing model, utilizing not only traditional equity financing but also innovatively using DeFi protocols for on-chain lending to accelerate the accumulation of ETH through leverage.

Innovative Financing Paths and Potential Risks

The financing methods used by these companies to purchase Ether also reflect a high degree of financial innovation, but they also come with significant risks.

In addition to traditional private placements and market price increases, more aggressive strategies have emerged in the market. For example, some companies sell their Bitcoin reserves directly in exchange for Ether; other companies have innovatively used DeFi protocols to borrow stablecoins by collateralizing assets to purchase more Ether, achieving on-chain leverage.

The narrative of "ETH reserves" has undoubtedly become a powerful catalyst for stock prices. Related companies' stock prices have experienced several times, even tens of times, surges in the short term. However, this announcement-driven rise is extremely fragile. Many companies have experienced more than a 70% sharp pullback shortly after reaching historical highs. This indicates that market sentiment is highly unstable and heavily speculative. In addition, the reserves of Ethereum also carry the following risk exposures:

• Price risk: The company's balance sheet is highly tied to the price of Ether. Once the market enters a bear market, the asset value will significantly decline.
• Financing risk: Highly dependent on continuous equity financing. If the market cools down, the financing channels may dry up, and the rights of existing shareholders may be continuously diluted.
• On-chain risks: Participating in staking and DeFi can bring returns, but it also introduces a series of blockchain-native risks such as smart contract vulnerabilities, node penalties, and oracle failures.
• Valuation Bubble: The market capitalization of many companies far exceeds the net asset value of their held Ether, creating a high premium. This premium can be maintained during market exuberance, but may be quickly erased during periods of calm or bear markets.

Who will become the "Ethereum Reserve Leader"?

Despite the surging trend, no company has yet emerged as a "whale" with absolute leadership and market pricing power in the Ethereum space. The reason lies in the higher strategic threshold and more complex narrative of ETH.

Simply "buy and hold" is insufficient to summarize its potential; effectively staking, participating in DeFi, and managing on-chain risks require deeper technical and operational capabilities.

Currently, several companies represented by the new company mentioned at the beginning of the article have the most potential to become leaders in the field, thanks to their strong founding teams and clear strategies. However, they are still in the early stages and need time to demonstrate the sustainability of their strategies and risk management capabilities.

There is no doubt that the "institutional era" of Ethereum has arrived. From "digital oil" to "internet bonds", Wall Street is assigning new value labels to Ethereum. This wave of reserves led by listed companies is not only injecting massive funds into the market, but more importantly, it is reshaping the perception and positioning of Ethereum in the global capital markets.

However, investors must stay alert: this is a high-risk, high-reward game. While chasing this feast of coin-stock linkage, one must also be wary of the significant volatility and deep risks lurking behind it. Although the road for Ethereum towards a trillion-dollar network is becoming clearer, it is destined to be a thorny path filled with opportunities and challenges.