A growing number of firms are approaching ether (ETH) treasuries with a new mindset — not just as long-term holdings, but as yield-generating assets. According to a recent report from Wall Street broker Bernstein, this shift could allow a $1 billion ETH treasury to generate $30 million to $50 million in annual income through staking alone.

Unlike traditional bitcoin (BTC) treasury strategies, such as MicroStrategy’s highly liquid reserve model, ETH-focused firms are embracing staking as a source of operating yield. Companies like BitMine Immersion Technologies (BMNR) and SharpLink Gaming (SBET) have already launched structured ether treasury strategies that capitalize on this approach.

Bernstein notes that ETH staking yields — currently just under 3% — typically fluctuate between 3% and 5%, offering an attractive, albeit more complex, alternative to passive crypto holdings.

But with yield comes risk. Ethereum’s proof-of-stake model rewards active participation, requiring capital deployment into validator nodes. This introduces operational, liquidity, and smart contract risks — especially when compared to the straightforward custody of bitcoin.

For example, staked ETH cannot be instantly withdrawn, creating potential liquidity mismatches in volatile markets. Advanced strategies like re-staking or DeFi-based yield farming can increase returns, but also amplify exposure to smart contract vulnerabilities and systemic risk.

“Unlike bitcoin, staking ETH demands a higher level of operational sophistication and risk oversight,” the report said.

Despite the challenges, Bernstein believes institutional treasuries are becoming better equipped to navigate these trade-offs, aided by maturing custody solutions and risk-management infrastructure.

Structural tailwinds are also in play. Nearly 30% of ETH’s supply is now staked, with another 10% locked in DeFi protocols. Coupled with increasing inflows from spot ETH ETFs, demand for ETH remains strong while circulating supply stays relatively flat.

Bernstein remains bullish on ether’s long-term potential to support institutional treasury strategies — so long as firms approach yield generation with discipline and robust risk controls.