3 things that lit the crypto market on fire

We talked a lot about Ethereum Treasury companies lately – Mainly because they were one of the main reasons why Eth pumping.

We got into that in more detail about that here.

But what makes a vital buterin, Father Ethereum, You have to say about them?

Well, we’re happy because we won’t need to guess – He recently jumped to Podcast to share his thoughts, and we are here to report them.

Briefly: Includes in the idea.

When public companies hold ETH – or invest in other companies holding ETH – it makes life easier for regular investors.

You can only buy a company’s stock and get indirect exposure eth without placing a crypto wallet or stress for confidence.

Besides, eth puts in front of Big, traditional money (Indexed Funds, Pension Plans and 401 (K) S), which are much more comfortable to buy shares than buying token.

But he draws the line on levers. This is where things can go wrong quickly:

1️⃣ Imagine the treasury company borrows money to invest in ETH.

2️⃣ FALL PRICE.

3️⃣ Borrings start to call, look for more collaterals, or force them to sell eth to repay the debt.

4️⃣ If several companies are in the same mess, their sale is pushing the price further.

5️⃣ This fall triggers a more forced sale and you are at once in Liquidation of cascade – A kind as a financial game of Jenge, where one bad move sends the whole tower that collapsed.

So Vitalik’s worst scenario is as follows: Eth treasury is too deep into the rainbow, there is a fall in price and that debt Turns a normal market drop into a fall that destroys the price and credibility of the ETH.

And until he gave the correct rulebook, here’s what a healthy eth treasurer is could they look like in practice:

👉 keeps the lever very low or completely avoids it;

👉 Transparent o eth holdings and any debt that is tied to them;

👉 holds large cash reserves to avoid forced sale in bad markets.

For now, Vitalik’s is quite confident.

Thinks most people leading eth treasury these days Know better than repeat the same stupid mistakes It caused the past disaster (*ahem *tera in 2022. *ahem* *).

So, tl; DR: Treasury can be great to adopt an ETH, but only if they treat long.

You are in knowledge now. But think about your friends – they probably have no idea. I wonder who could fix it … 😃🫵 Expand the word and be a hero you know you are!