Ethereum’s MicroStrategy Imitation Flops, Refunds Depositors

An attempt to replicate MicroStrategy’s Bitcoin-buying playbook on Ethereum has flopped spectacularly, with its founders now returning investor funds.

EtherStrategy, launched by Ethereum veterans Justin Bram and Joseph Delong, aimed to sell shares and issue debt to accumulate Ether (ETH), much like MicroStrategy does with Bitcoin.

However, the project attracted just 270 ETH (worth around $864,000) as of Friday afternoon in New York—far below its 10,000 ETH cap.

“There was not enough interest or demand to justify launching the DAO in the current state,” the EtherStrategy team admitted in an X post.

During the testing phase of the protocol and before the announcement of the launch, the UI was misconfigured, allowing users to deposit to the wrong address. In this short amount of time, 165 ETH was deposited by users to the incorrect address. The UI was fixed immediately.

We…

— Ether Strategy (@ethstrateg) January 30, 2025

Why EtherStrategy Failed

EtherStrategy seemed promising before launch, with 5,000 users pledging to deposit around 40,000 ETH, according to Bram.

But things went south quickly:
❌ No third-party audit—a red flag in a space notorious for exploits.
❌ Website bug—some deposits were mistakenly sent to the wrong crypto address.
❌ Reversibility issues—blockchain transactions are final, making misrouted funds difficult to recover.

Co-founder Joseph Delong, former SushiSwap CTO, has promised to reimburse affected depositors.

MicroStrategy’s Bitcoin Playbook vs. EtherStrategy

The concept was inspired by MicroStrategy, whose founder Michael Saylor turned his company into a Bitcoin accumulation machine.

• MicroStrategy issues stock and takes on debt to buy more BTC.
• The strategy paid off massively, as Bitcoin’s price soared.
• MicroStrategy’s stock has outperformed even Bitcoin itself, leading some analysts to question its valuation.

EtherStrategy planned a similar approach, issuing ETHSR tokens representing shares in an ETH pool.

Unlike Bitcoin, Ether generates staking yield, leading Bram to expect ETHSR to trade at a slight premium—1-2% above the underlying ETH value.

“At a bare minimum, you’re just getting a liquid staking token like Lido’s stETH,” Bram told DL News.

However, the execution missteps and low initial demand made it clear that EtherStrategy wasn’t going to be Ethereum’s MicroStrategy.

The Crypto Risk Factor

EtherStrategy’s failure highlights the unpredictability of crypto markets.

“Crypto is risky. Anything can and will happen,” Bram admitted.

The project will now shut down, with all deposits refunded.

While Ethereum-based investment models may still emerge in the future, EtherStrategy’s collapse suggests that not every playbook translates across blockchains.

For now, MicroStrategy remains unmatched in its corporate Bitcoin strategy, and Ether investors will have to look elsewhere for institutional ETH accumulation models