Why are investors still keen to invest in ETH treasury companies, even with existing ETH ETFs? There are several reasons, one of which is the additional staking income and the potential of crypto finance. Currently, ETH ETFs do not generate staking income, so the returns from purchasing ETH ETFs primarily come from ETH price appreciation (after deducting management fees, which generally range from 0.15% to 2.5%). In other words, purchasing ETH ETF shares is equivalent to directly holding ETH.
Buying shares in ETH treasury companies is different; it provides indirect ETH exposure. Companies use ETH as a core treasury asset, allowing them to stake ETH to generate income. They can then participate in DeFi, support stablecoins, and other active asset management activities to further increase returns. Furthermore, these potential returns can be used to repurchase shares or purchase more ETH, creating a certain flywheel of growth over a period of time. Furthermore, treasury companies can raise funds through other means (such as issuing additional shares or debt) to purchase more ETH.
As can be seen from the above, ETH treasury companies offer additional income and the potential for compound growth over a specific period of time, while ETH ETFs primarily provide direct ETH exposure. This means that, due to these potential opportunities, ETH Treasury's stock has a stronger narrative and higher speculative nature than ETH ETFs, resulting in higher potential returns but also higher risks. ETH Treasury is more suitable for aggressive investors with a higher risk appetite, as it effectively amplifies ETH's risk exposure (higher risk, greater potential returns). ETH ETFs, on the other hand, primarily hold ETH's own risk exposure and are more suitable for more conservative investors.
