SharpLink Gaming Drops $780 Million on Ethereum in July

SharpLink Gaming has spent $780 million on Ethereum in July, establishing itself as one of the asset’s largest holders as the cryptocurrency’s price surged to a seven-month high.

The Minnesota-based Ethereum treasury firm, which began the month holding 198,200 ETH, now controls 438,200 ETH, an 121% increase in four weeks, according to a press release. Based on recent prices, that stockpile was worth $1.4 billion on Tuesday, the second largest among corporate Ethereum treasuries.

SharpLink aims to increase shareholder value by boosting the amount of Ethereum it owns per fully diluted share. The company consistently issued common stock as a way to fund purchases in July, in addition to raising cash through a private placement last month. Last week, SharpLink said it purchased 77,200 Ethereum, “maintaining its aggressive acquisition pace.”

In July, SharpLink gained $852 million from issuing nearly 45 million common shares, capturing a premium that its stock trades at relative to its crypto holdings, mirroring elements of Strategy’s Bitcoin-buying  playbook.

SharpLink said that the Ethereum it holds per 1,000 assumed diluted shares issued and outstanding, a metric dubbed “ETH Concentration,” increased to 3.4, as of Sunday, from 2.29 three weeks prior.

Leveraging Ethereum’s proof-of-stake consensus model, the company said that it has generated 722 Ethereum worth $2.8 million since it pivoted away from sports gambling marketing. Nearly all the Ethereum SharpLink owns has been devoted to staking protocols, allowing the company to earn rewards by helping validate Ethereum transactions.

Ethereum’s price rose above $3,900 on Monday before retreating, according to crypto data provider CoinGecko. Although the asset’s price has increased 60% over the past month, momentum has cooled over the past week, with the asset around 21% away from its pandemic-era high of $4,900.

SharpLink shares have tumbled 31% over the past week to $18.82 as Ethereum’s price has lost momentum; however, the stock is still up 100% over the past month, according to Yahoo Finance. In May, SharpLink’s stock price soared to $124 before plummeting on profit-taking among investors that participated in the company’s private placement.

Ethereum software giant Consensys, known for its MetaMask digital wallet, said on Monday that SharpLink would be among firms stewarding the token for its Ethereum layer-2 scaling network Linea. The group, called the Linea Consortium, will help oversee 75% of its eventual supply. (Disclosure: Consensys is one of 22 investors in an editorially independent Decrypt.)

That means SharpLink, which is chaired by Consensys CEO and Ethereum co-founder Joe Lubin, will help distribute tokens to grow the layer-2 network, alongside other members.

SharpLink gaming is the second largest holder of Ethereum to join the Strategic Ethereum Reserve, a group of Ethereum-aligned entities. BitMine Immersion, which has pivoted its focus from Bitcoin mining, owns around 625,000 Ethereum, a sum worth roughly $2.4 billion.

In July, SharpLink made other notable acquisitions, besides massive amounts of Ethereum. That included a former digital assets executive at BlackRock, Joseph Chalom, who was appointed co-CEO of SharpLink last week.