Ethereum & Bitcoin Treasuries: Understanding the Mania and Its Historical Parallels

In 2025 the corporate digital‑asset treasury craze turned into one of crypto’s biggest stories. Publicly listed companies, SPACs and start‑ups have been raising capital through equity sales and convertible bonds to purchase large amounts of Bitcoin and Ether for their balance sheets. A few headline numbers show the scale:

• Size of the phenomenon.
  Reuters reported that corporate treasuries held 966 ,304 ETH (≈US$3.5 billion) by the end of July 2025reuters.com—a jump from just under 116 ,000 ETH at the end of 2024.
  According to The Defiant, digital‑asset treasury companies (DATCOs) collectively hold over US$100 billion in digital assetsthedefiant.io. They control about 4.74 % of all Bitcoin in circulation and an estimated 3.4 % of Ethereum’s supply, an astonishing accumulation for a trend that barely existed a few years ago.
• Who’s leading? The strategy was popularized by MicroStrategy (now trading under the name Strategy), which raised billions via equity and debt to acquire Bitcoin. Its holdings exceed 629 ,376 BTCthedefiant.io and the stock’s meteoric rise inspired dozens of copy‑cats. Other firms such as BitMine, BTCS, GameSquare and ETHZilla have acquired hundreds of thousands of ETHthedefiant.io.

Why corporate treasuries are hoarding BTC and ETH

Several forces have converged to make Bitcoin and Ethereum attractive as treasury assets:

1. Inflation‑hedge narrative and speculation on scarcity

Bitcoin’s fixed supply of 21 million coins means it is often pitched as digital gold. Crypto commentators argue that holding BTC provides protection against monetary debasement. A 2025 analysis noted that over 150 public firms now own almost a million BTCccn.com and that the trend is accelerating as executives look for a hedge against inflation. The success of MicroStrategy, whose CEO described Bitcoin as a superior store of value, created a template that others are eager to follow.

2. Productive yield from staking

Unlike Bitcoin, Ether is a productive asset. The Ethereum network now uses proof‑of‑stake, allowing holders to lock up ETH and earn 3–4 % staking rewardsreuters.com (other sources report 7–8 % yieldsccn.com). Corporate treasuries and DAOs view ETH as a “self‑securing, cash‑generating asset” because it yields rewards while also powering DeFi and stablecoin infrastructurethedefiant.io. This ability to earn a return makes ETH attractive to CFOs seeking more than just appreciation.

3. Regulatory and policy tailwinds

Several regulatory developments over 2024–25 reduced the perceived risk of holding crypto on corporate balance sheets. The GENIUS Act created a framework for stablecoins, fair‑value accounting rules clarified how crypto should be reported, and in 2024 the SEC approved a suite of spot‑Bitcoin ETFs. The Capriole report notes that a new pro‑Bitcoin administration in Washington ended the banking crackdown known as “Operation Choke Point 2.0,” approved Bitcoin in 401(k) plans and established a U.S. Strategic Bitcoin Reserve, signalling institutional acceptance. These policy shifts gave treasuries and banks confidence to allocate capital.

4. Easy capital and arbitrage opportunities

Companies have exploited low borrowing costs to finance crypto hoards. MicroStrategy issued debt, convertibles and stock to buy Bitcoin, effectively arbitraging low interest rates against high expected BTC returns. This playbook mirrors private‑equity strategies: raise cheap capital, buy a volatile asset and hope leverage amplifies the upside. As Capriole notes, the strategy works as long as Bitcoin appreciates and financing costs remain low.

5. Share‑price momentum and marketing hype

Announcements of crypto treasuries have, at least in the short term, boosted stock prices. Reuters noted that when BitMine and GameSquare disclosed plans to accumulate ETH their shares spiked 3,679 % and 123 %, respectivelyreuters.com—behaviour reminiscent of “meme‑stock” rallies. Some analysts argue that treasuries are as much a marketing strategy as a financial one; adding BTC or ETH to a balance sheet signals innovation and can attract retail tradersthedefiant.io.

What are the risks? Lessons from history

Digital‑asset treasury companies may seem new, but financial history offers instructive parallels.

Subprime mortgages and 2008

Regulators have repeatedly warned that crypto’s rapid integration with traditional finance could echo the U.S. subprime mortgage bust. A Reuters column from 2022 highlighted that as crypto links with banks and investors deepen, small exposures could hide larger systemic risksreuters.com. The Financial Stability Board warned that like subprime, a “small amount of known exposure does not necessarily mean a small amount of risk”reuters.com. Corporate treasuries borrowing to buy volatile crypto create leverage similar to mortgage‑backed securities; a price crash could trigger margin calls and forced selling, spreading stress beyond crypto.

1920s investment trusts

The Capriole report draws a striking analogy between today’s treasury companies and speculative investment trusts of the late 1920s. In that era, trusts leveraged investor capital to buy stocks, traded at premiums of 2–3× their underlying assets and used heavy leverage. When the stock market crashed in 1929 these trusts collapsed, prompting the U.S. to pass the Investment Company Act of 1940. Digital‑asset treasuries similarly trade at premiums over the value of their holdings (mNAV > 1); if prices fall, those premiums evaporate, making equity issuance dilutive and forcing sales. Because crypto assets are not classified as securities, these treasuries are exempt from the very regulations created to prevent another 1920s‑style collapse.

The private‑equity game and leverage unwind

MicroStrategy’s strategy of raising cheap debt to buy Bitcoin resembles the private‑equity “carry trade,” where firms use leverage to buy assets and hope appreciation outpaces financing costs. Capriole warns that a leverage unwind—if companies borrow too aggressively—could trigger a liquidation cascade. Even if only 5–10 % of treasuries over‑leverage, a 40–50 % Bitcoin drawdown could force them to dump holdings to cover debts, causing prices and their own stock to collapse. The same flywheel that drives crypto prices up could run in reverse.

Conclusion: Mania or transformation?

The Ethereum and Bitcoin treasury boom is driven by a mix of macro narratives (inflation hedges, productive staking yields), regulatory green lights, cheap capital and the social media halo around early success stories. It has fuelled meteoric share‑price gains and helped push crypto adoption into the corporate mainstream. Yet history warns us that financial innovations built on leverage and momentum often end badly. Regulators already liken the trend to the subprime mortgage bubblereuters.com, and analysts have drawn parallels with 1920s investment trusts. As more companies imitate the playbook, the line between innovator and imitator blurs; and as Warren Buffett quipped, eventually “the idiots” arrive.

Whether this boom represents a sustainable reimagining of corporate treasury management or another speculative bubble will depend on two factors: the long‑term performance of Bitcoin and Ethereum, and whether companies avoid the over‑leverage and herd behaviour that doomed prior financial manias. Investors and policymakers would do well to remember that while history doesn’t repeat, it often rhymes.

Financial manias tied to treasuries and balance sheets don’t last forever. Historically, waves like the dot-com IPO frenzy (1995–2000) or subprime credit expansion (2002–2007) burned hot for 2–5 years before collapsing under their own weight.

The Bitcoin and Ethereum treasury boom looks similar.

• BTC treasuries: Born in 2020 when MicroStrategy pioneered the move, scaled with Tesla in 2021, then weathered brutal drawdowns. In 2025, dedicated “Bitcoin Treasury Companies” are raising billions, creating recursive leverage. By 2027, the first bust cycle is expected.
• ETH treasuries: Emerged later, after the 2023 Shanghai upgrade unlocked staking. Corporates saw yield as “bond-like income.” By 2025, ETH treasuries are in mania mode. But like structured credit in 2007, they risk collapse if prices stagnate or staking yields fail to offset drawdowns.

Projection:

Beyond = survivors may institutionalize the practice (as Amazon did post–dot-com), but most players will vanish.

2025–2027 = peak mania.

By 2027 = likely first wave of treasury collapses.