Wall Street capital flows into Ethereum, opening a new chapter for institutional investment

Recently, a strong wave of capital is flowing from Wall Street to Ethereum. Following Bitcoin being hailed as "digital gold" and becoming a regular feature on the balance sheets of some listed companies, Ethereum, with its unique profitability and ecosystem value, is rapidly rising as "digital oil" in the eyes of institutional investors, opening a new chapter in corporate strategic reserves.

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

Emerging company "Ethereum Machine" leads the trend

Recently, a new company called "Ether Machine" (以太坊机器), created by several early Ethereum builders and experienced financial professionals, announced that it will go public on NASDAQ through a merger with a blank check company.

According to the announcement, Ether Machine plans to hold more than 400,000 Ethereum at the time of its listing, with a total value exceeding $1.5 billion. This huge amount of funds mainly comes from two parts:

1. Company co-founder and chairman Andrew Keys invested approximately $645 million as cornerstone investment;
2. Secured over $800 million in common stock financing from several top crypto-native and institutional investors.

The positioning of the Ether Machine goes far beyond that of a passive asset holder. It defines itself as an "active ETH generation company," aiming to provide investors with safe, compliant, and transparent ETH-denominated returns through specialized operations. Its core strategies include:

• Staking and Re-staking: Utilize its large ETH reserves to participate in the security verification of the Ethereum network, thereby earning stable staking rewards.
• DeFi Strategy: Participate in well-established DeFi protocols to earn additional treasury yields, under the premise of a rigorous risk assessment.
• Ecosystem Catalysis and Infrastructure Development: 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 core team of Ether Machine is known as the "Ethereum Avengers", consisting of several professionals with extensive experience in the Ethereum ecosystem.

Public companies are competing to increase their holdings of Ethereum

The emergence of the Ether Machine is not an isolated incident; it is precisely a reflection of the surging new wave currently sweeping Wall Street. Several listed companies have already taken action, incorporating Ethereum into their core balance sheets, and their stock prices have experienced significant fluctuations. Companies are competing to buy ETH, wanting to outdo each other in terms of reserve quantity.

The following are the actions of several representative companies:

1. A certain iGaming company has launched 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.

2. 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.

3. 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 initial public offering and liquidating its on-hand Bitcoin, using all proceeds to increase its holdings in Ethereum.

4. A certain digital media and gaming company has also joined the battle, announcing the launch of an Ethereum reserve plan of up to $250 million, and has completed its first round of purchases. To continue increasing its stake, the company also plans to raise $70 million through a share placement specifically for the purchase of ETH.

5. A blockchain concept stock has been deeply involved 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 continued ETH purchases.

Innovative Financing Paths and Potential Risks

The financing methods employed by these companies to purchase ETH 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 directly sell their Bitcoin reserves to exchange for Ether; other companies have innovatively utilized DeFi protocols to borrow stablecoins by collateralizing assets to purchase more Ether, achieving on-chain leverage operations.

The narrative of "ETH Microstrategy" has undoubtedly become a powerful catalyst for stock prices. Related companies' stock prices have experienced several times or even tens of times surges in a short period. However, this announcement-driven rise is extremely fragile. Many companies, after reaching historical highs, have experienced severe pullbacks of over 70% in a short time. This indicates that market sentiment is highly unstable and speculative.

In addition, the reserve of Ethereum also has the following risk exposures:

• Price risk: The company's balance sheet is highly correlated with the price of Ether; once the market enters a bear market, the value of assets will shrink significantly.
• Financing risk: Highly dependent on continuous equity financing. If the market cools down, financing channels may dry up, leading to continuous dilution of existing shareholders' equity.
• On-chain risks: Participating in staking and DeFi can generate profits, but it also introduces a series of blockchain-native risks such as smart contract vulnerabilities, node penalties, and oracle failures.
• Valuation Bubble: The market value of many companies far exceeds the net asset value of their held Ether, resulting in a high premium. This premium can be sustained during market euphoria, but may be quickly erased during periods of calm or bear markets.

Who will become the "Ethereum version of MicroStrategy"?

Despite the overwhelming wave of enthusiasm, there has yet to be a company that can become an "Ethereum whale" with absolute leadership and market pricing power in the same way that MicroStrategy has in the Bitcoin space. The reason is that the strategic threshold for ETH is higher and the narrative is more complex.

Simply "buying and holding" is not enough to summarize its potential; effectively staking, participating in DeFi, and managing on-chain risks require deeper technical and operational capabilities.

Currently, companies represented by Ether Machine have the greatest 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 attaching new value labels to Ethereum. This wave of reserves led by publicly 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 remain clear-headed: this is a high-risk, high-reward game. While chasing this feast of cryptocurrency and stock linkage, one must also be wary of the enormous volatility and deep risks lurking behind it. Although the path for Ethereum towards a trillion-dollar network has become clearer, it is destined to be a thorny road filled with opportunities and challenges.