Ethereum co-founder enters the game, turning 400 million into 2.5 billion overnight: Is there an ETH version of MicroStrategy?

Jessy, Golden Finance

On May 27, sports betting operator SharpLink Gaming (NASDAQ: SBET) announced that it has secured $425 million in private investment, which will be used to purchase Ethereum as the company's primary treasury reserve asset.

The lead investor in this private placement is Consensys Software Inc., with participants including ParaFi Capital, Electric Capital, Pantera Capital, Galaxy Digital, and others. The transaction is expected to be completed on May 29, and after the transaction is completed, Ethereum co-founder and Consensys founder and CEO Joseph Lubin will serve as the chairman of the SharpLink board and will assist the company in developing its core business as a strategic advisor.

After the announcement, SharpLink's stock price increased by over 650% in a single day, with a cumulative increase of 17.56 times over three days. Currently, its stock market capitalization is 25 million USD, while the funds raised amount to 425 million USD, and the current book value has reached 2.5 billion USD.

Companies reserve crypto assets as treasury reserves, originally focusing on Bitcoin. SharpLink Gaming's move is also the first among publicly listed companies in the US to make Ethereum a core reserve asset. Will SharpLink Gaming spark a wave of Ethereum reserve competition among publicly listed companies?

The loss-making gambling company SharpLink Gaming

SharpLink Gaming is an online technology company operating in the fields of sports betting and online casino games. The company was founded on December 27, 1995, and is headquartered in Minneapolis, Minnesota, USA.

The company's specific business is to connect sports fans with licensed online sports betting operators through proprietary smart online conversion technology, providing personalized betting offers to sports fans. The company also operates an affiliate marketing website, offering high-quality traffic and player acquisition, retention, and conversion services for sports betting and online casino operators worldwide. Additionally, SharpLink specializes in helping sports media companies develop strategies, products, and innovative solutions to drive deep customer engagement through highly interactive sports games and mobile applications.

The company's operating conditions are not ideal, with total revenue of $4.95 million and a net profit of -$14.24 million in 2023. In 2024, the total revenue is projected to be $3.66 million, with a net profit of -$4.57 million.

The overall operating condition of the company is poor, primarily due to high operating costs. According to the financial report for the third quarter of 2024, the cost accounted for a high proportion of revenue, reaching 80.4%, mainly due to increased casino expenditures. Additionally, the company's operations involve various expenses such as employee salaries, technical maintenance, and marketing promotions.

Similarly, the third quarter financial report for 2024 shows that the company's revenue has declined mainly due to weak market conditions and customer loss. The competition in the gambling industry is fierce, and any misstep can lead to pressure from competitors.

Trends in Corporate ETH Reserves

SharpLink Gaming is not the first company to hold reserves of Ethereum, but it is the first publicly traded company on the US stock market to raise substantial funds through the sale of private equity to build an Ethereum treasury.

In the previous cycle, Ethereum was the second most popular cryptocurrency asset held by major companies. In this cycle, led by MicroStrategy, a wave of Bitcoin reserve enthusiasm has emerged among listed companies, but there are still some companies quietly holding Ethereum. Here are some listed companies that hold Ethereum:

Boyaa Interactive: A listed company on the Hong Kong stock exchange, as of November 12, 2024, holds 15,445 ETH. However, by the end of 2024, it replaced Ethereum with Bitcoin.

BTCS: As of May, the publicly listed company on the US stock market holds approximately 12,500 Ethereum. In May 2025, it announced an agreement with ATW Partners to raise funds through the issuance of convertible notes, with a total financing amount of up to $57.8 million. It is reported that all the funds raised will be used to purchase Ethereum to expand its verification node operation scale on the Ethereum network.

Blueport Interactive: A Hong Kong listed company, in its 2024 interim performance report disclosed that the company holds 848.386 Ethereum.

Remixpoint: A publicly listed company in Japan, as of May 27, 2025, the company holds a variety of mainstream crypto assets including Ethereum.

Intchains Group: A Nasdaq-listed company developing altcoin mining products, holding approximately 7023 ETH as of March 31, 2025.

Not just for doing Polymarket on Ethereum

For SharpLink Gaming, the announcement of acquiring Ethereum has directly impacted its stock by making it a crypto concept stock. After the news was released, SharpLink's stock price surged over 650% in a single day, with a cumulative increase of 17.56 times over three days.

This chronically loss-making company seems to be on the verge of a significant turnaround by embracing cryptocurrency.

The recent purchase of Ethereum also seems to signal a long-term transformation and development path for the company. It is reported that Consensys, as a major investor, will provide SharpLink with technical and resource support from the Ethereum ecosystem, exploring innovative scenarios such as on-chain gambling and smart contract integration. SharpLink CEO Rob Phythian stated that this move aims to "deeply bind the company's balance sheet with the growth of the crypto economy" and promote the transformation of traditional gambling business to Web3.

However, SharpLink's desired direction for transformation is not just to become a polymarket on the Ethereum chain. Rather, it aims to become a micro-strategy version on Ethereum.

The significance of SharpLink's large-scale purchase of Ethereum holds a certain symbolic meaning for the crypto industry, as it seems to indicate that corporate treasury assets are expanding from a single Bitcoin to a diversified range of crypto assets. ETH, with its smart contract and staking features, will also be more favored.

A more realistic point is that this round of private equity financing is led by Consensys, which is highly associated with Ethereum. Joseph Lubin, co-founder of Ethereum and founder and CEO of Consensys, will also serve as the chairman of the board of SharpLink. The entry of Ethereum stakeholders into a traditional company and the vigorous promotion of an Ethereum strategic reserve at the company level seems to be aimed at establishing a benchmark and example globally, encouraging major companies to follow suit by treating Ethereum as a treasury reserve. This will continuously enhance the acceptance of Ethereum in traditional finance. Overall, Ethereum will ultimately be the final beneficiary.