Yield-Chasing: What Risks Do Crypto Treasury Firms Face?
In the ever-evolving world of cryptocurrency, ETH treasury firms are increasingly tempted by the promise of high yields. But what risks do they face when they chase these yields? Joseph Chalom, co-CEO of Sharplink Gaming, has noted that those who do may find themselves significantly more exposed in times of market downturns.
What are the specific risks linked to yield-chasing?
When firms chase after yield, they often engage in activities that carry inherent risks. For instance, they may lend or stake their assets, and should their counterparties default, losses may follow. Chalom has highlighted the following risks:
- Engaging in yield-chasing can lead to credit risk if assets are lent or staked and the counterparty defaults.
- There is…
