Ethereum designer Vitalik discusses the risks and opportunities of the reserve company model

As more and more publicly traded companies enter the Ethereum market, Ethereum co-founder Vitalik Buterin recently shared his in-depth thoughts on this phenomenon in the well-known crypto podcast “Bankless.” He recognizes that this new trend helps bring Ether to a broader investment audience, but also candidly warns: if reserve companies over-leverage, this game could turn into a dangerous “over-leverage gambling.”

The Potential of Reserve Companies: Opening New Investment Channels

Vitalik pointed out that the emergence of Ether reserve companies indeed provides valuable services. Compared to directly holding Ether, investing in publicly traded companies that hold Ether offers more flexible participation options for investors with different financial backgrounds. This model allows both institutional and retail investors to enter the market in ways that match their risk tolerance, undoubtedly expanding Ether’s market base.

According to the latest statistics, the total market value of publicly traded companies holding Ether has soared to $11.77 billion. Among them, BitMine Immersion Technologies leads with 833,100 Ether holdings, worth about $3.2 billion, making it the publicly traded company with the most Ether holdings worldwide; SharpLink Gaming and The Ether Machine hold Ether valued at $2 billion and $1.34 billion, respectively.

Vitalik’s Dual Warnings: The Abyss Behind Opportunities

However, Vitalik’s support is not unconditional. He emphasizes that the future of Ether must not be built on “over-leverage.” In the interview, he straightforwardly described the worst-case chain reaction: when Ether’s price drops, it triggers forced liquidations, which then cause a chain reaction, further crashing the price, ultimately leading to massive market capital evaporation and severely damaging Ether’s market reputation.

Vitalik succinctly summarized his core concern with one sentence: “If three years from now someone tells me that Ether’s collapse was triggered by reserve companies, I would instinctively think that they played this mechanism into an over-leverage game.”

This warning carries profound implications. Vitalik uses Terra founder Do Kwon as a cautionary example, implying how speculative mindsets and irrational leverage use can destroy the entire ecosystem.

Market Validation: Ether Trends and Investment Enthusiasm

Despite the risks, market data shows a strong rebound momentum. Ether has experienced a rollercoaster this year, dropping from about $3,685 in early January to a low of $1,470 on April 9, then rebounding over 163%. As of the latest data (January 21, 2026), Ether is quoted at $3,030, with a 24-hour increase of 1.31%.

Industry experts generally believe that the rise of Ether reserve companies is a key catalyst for this strong rebound, gradually narrowing the performance gap between Ether, Bitcoin, and Solana in this cycle.

Industry Outlook: Seeking Breakthroughs Within Regulations

Vitalik expressed optimism about the discipline within the Ether investment community. He emphasized that “these participants are not speculative players following Do Kwon,” implying that the Ether community has a stronger risk awareness and a better understanding of long-term value. This confidence is based on the maturity of the community and also reflects expectations for a rational investment culture.

The future of the reserve company model depends on whether participants can find a balance between opportunity and risk. Vitalik’s discussion both endorses this innovative model and sounds an alarm about potential bubbles and risks. This attitude of both support and caution is exactly the responsibility a mature technical leader should have.