Are South Korean retail merchants the one factor maintaining Ethereum treasury corporations alive?

Ethereum’s ongoing underperformance in opposition to Bitcoin has reignited debate over what’s holding the asset up, and who’s actually behind its demand.

In accordance with Bitcoin advocate Samson Mow, roughly $6 billion in South Korean retail cash is now propping up so-called Ethereum treasuries, corporations accumulating ETH as a balance-sheet asset echoing MicroStrategy’s Bitcoin technique. Mow issued the declare in an Oct. 5 submit on X, arguing that “ETH influencers” have been flying to Seoul to courtroom retail merchants chasing the subsequent “technique play.”

In accordance with CoinMarketCap, as of Oct. 6, ETH has slipped about 1.9% prior to now 24 hours and is down roughly 5% in opposition to Bitcoin over the previous month. That weak point, Mow urged, exposes how short-term retail enthusiasm, quite than institutional conviction, is sustaining Ethereum’s valuation.

Knowledge from the Strategic ETH Reserve reveals that 67 entities, together with BitMine and SharpLink, collectively maintain about 5.49 million ETH (roughly $25 billion), or 4.5% of the full provide.

Mow attributed a lot of this publicity to South Korean retail traders identified regionally as seohak gaemie, claiming they’ve funneled round $6 billion into Ethereum treasury corporations. He argued that promoters have been advertising these companies because the “subsequent MicroStrategy,” luring merchants searching for straightforward analogs to Bitcoin’s company accumulation playbook:

“Many of those traders have zero thought in regards to the ETH/BTC chart and assume they’re shopping for the subsequent technique commerce.”

He warned that enthusiasm constructed on “monetary illiteracy” might backfire, particularly as Ethereum continues to lag behind Bitcoin in relative efficiency.

Ethereum’s worth efficiency displays the priority. Regardless of periodic inflows and renewed narrative pushes, ETH has remained capped beneath its earlier all-time excessive of $4,946 and continues to weaken in opposition to Bitcoin. The ETH/BTC ratio has fallen by over 5% prior to now yr, reinforcing the notion that a lot of the help for Ethereum’s market cap is narrative-driven quite than based mostly on elementary development or institutional adoption.

Mow’s critique aligns with feedback from Mechanism Capital co-founder Andrew Kang, who has additionally solid doubt on the monetary logic behind Ethereum-based treasuries. Kang pointed to tasks like Tom Lee’s BitMine as examples of “undisciplined treasury fashions” that lack the monetary construction seen in profitable Bitcoin-holding companies. “The technicals for Ethereum are bearish,” Kang stated, including that ETH’s long-term vary might stay between $1,000 and $4,800 with no main change in fundamentals.

Kang concluded that Ethereum’s valuation “comes primarily from monetary illiteracy,” evaluating its speculative momentum to XRP’s historic rallies. He argued that whereas retail hype can maintain a big market cap for a while, it’s not a sturdy base: “The valuation that may be derived from monetary illiteracy will not be infinite.”

Whether or not Korean retail demand turns into a brand new structural pillar for Ethereum, or the final gasp of a fading narrative, might rely on how lengthy the “ETH treasury” story can outrun the chart.

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