The ETH treasury is more sustainable than Bitcoin and Solana, opening up long term bullish prospects.

Ethereum (ETH) is fluctuating around the 4,520 USD mark on Monday, as Standard Chartered noted that cryptocurrency reserve funds focusing on accumulating this top altcoin have a better chance of succeeding compared to funds prioritizing holding Bitcoin or Solana.

Ethereum DATs have a higher chance of survival than Bitcoin and SOL

Cryptocurrency reserve funds (Digital Asset Treasuries – DATs), which are publicly listed companies holding large amounts of cryptocurrency on their balance sheets, are believed to have a greater chance of success if they focus on Ethereum rather than Bitcoin or Solana. This assessment was made by Mr. Geoffrey Kendrick, Global Head of Digital Asset Research at Standard Chartered.

In the report released on Monday, the bank noted that investors have reason to be cautious before the situation of stock prices and the mNAV index of the DATs being compressed, as this directly affects the ability to raise capital to expand the digital asset portfolio. The mNAV index (Market to Net Asset Value) compares a company's market capitalization to the value of the assets they hold. If mNAV is greater than 1, it indicates that the company is trading at a higher level than its net asset value – a sign that reflects market confidence.

DATs mNAV | Source: Standard Chartered*"This is a key factor, as a sustainable DAT must maintain mNAV above 1 to continue accumulating the underlying asset," Kendrick emphasized.*

According to him, the performance of DATs in the future will depend on the ability to access cheap funding, the scale of operations, as well as whether the underlying assets provide returns. In addition to the capital flow from ETFs, DATs have also made a significant impact on the prices of Bitcoin and Ethereum over the past year.

However, Kendrick warns that in the long term, Bitcoin DATs are at risk of maintaining a low mNAV due to the market becoming increasingly saturated and the trend of consolidation, leading to a decline in new net demand. In contrast, DATs focused on Ethereum and Solana are expected to perform better due to their ability to generate yields from reserves.

"We believe that ETH and SOL DATs deserve to enjoy a higher mNAV compared to BTC DATs, thanks to staking yields," Kendrick said.

Among them, Ethereum DATs are assessed to have outstanding sustainable potential. A challenge for Solana DATs comes from new regulations by Nasdaq, requiring companies to have shareholder approval before raising funds to purchase crypto – this could hinder development as Solana DATs are still in the early stages.

Currently, BitMine Immersion (BMNR) – the company holding the largest ETH reserve worth approximately 9.7 billion USD – has been listed on the NYSE and announced plans to buy back 5% of the total circulating ETH supply.

"I believe that Ethereum DATs have the highest sustainable probability, and therefore, the demand to buy ETH from this group will remain stable in the long term," Kendrick affirmed.

Previously, Standard Chartered also evaluated Ethereum DATs as "very worthy of investment," while forecasting that the mNAV index of this group would significantly outperform the strategy focused on Bitcoin that Michael Saylor pursues.

Ethereum Price Forecast: ETH Tests the $4,500 Level and the 14-Day EMA After Weekend Decline

In the past 24 hours, the Ethereum market witnessed a wave of futures contract liquidations amounting to 113.8 million USD, including 93.2 million USD in Long positions and 20.6 million USD in Short positions.

After being rejected at the 4,700 USD level last weekend, ETH has pulled back to test the important 4,500 USD threshold during Monday's trading, supported by the 14-day EMA line. If this level is breached, the cryptocurrency may find support at the 50-day SMA line. However, in a worse-case scenario, losing the 50-day SMA could pull ETH back deeper into the psychological support area around 4,000 USD.

ETH/USDT Daily Chart | Source: TradingViewConversely, to trigger a bullish breakout, ETH needs to surpass the historical resistance level of 4,956 USD. Currently, technical indicators such as RSI and Stochastic Oscillator are both signaling weakness, with RSI touching its own moving average and at risk of sliding below neutral.

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