ETH Treasury Firms Face Risk, Sharplink CEO Warns
Sharplink CEO Joseph Chalom warns ETH treasury firms about serious risks if the crypto market declines.
- ETH treasury strategies are vulnerable in a downtrend.
- Yield-chasing firms risk major losses, says Sharplink CEO.
- Risk management is vital for crypto-based treasuries.
In a recent statement, Joseph Chalom, the CEO of Sharplink Gaming, issued a stark warning to companies managing treasuries in Ethereum ($ETH). He highlighted that while yield-chasing may seem profitable during a bull market, it could expose firms to significant risks when the market turns bearish.
Many crypto-native businesses and decentralized autonomous organizations (DAOs) are turning to Ethereum-based strategies to boost yields on idle capital. This includes staking ETH, participating in DeFi lending platforms, and providing liquidity on decentralized exchanges. While these options can generate high returns, they also carry volatility and smart contract risk — especially in a downturn.
Market Downturns Could Amplify Losses
Chalom emphasized that ETH treasury risk isn’t just theoretical. In past bear markets, firms with large ETH exposure saw the value of their holdings drop by over 50%. For companies relying on these holdings to fund operations, this can be devastating.
Treasuries chasing double-digit yields may be ignoring the broader market risks. If ETH prices fall sharply, not only are capital gains lost, but the yield strategies themselves could become unprofitable or lead to liquidation in more aggressive DeFi positions.
Risk Management is Non-Negotiable
As crypto treasuries become more common, especially in startups and Web3 firms, Chalom advises building in risk management frameworks. This includes diversifying into stable assets, setting clear exposure limits, and preparing for market downturns.
Sharplink Gaming’s stance reflects a growing concern in the industry: without solid risk strategies, even well-funded treasury firms can find themselves in financial distress.
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