Latest news with #SBET
Forbes
10 hours ago
- Business
- Forbes
Are Crypto Treasury Companies Selling Air? Inside An $80Billion Bubble
MIAMI, FLORIDA - JUNE 04: MicroStrategy CEO Michael Saylor walks through the Bitcoin 2021 ... More Convention, a crypto-currency conference held at the Mana Convention Center in Wynwood on June 04, 2021 in Miami, Florida. The crypto conference is expected to draw 50,000 people and runs from Friday, June 4 through June 6th. (Photo by) The crypto treasury company trend has exploded since MicroStrategy first bought bitcoin in 2020. Companies like SharpLink Gaming (SBET), which announced a massive $425 million private placement to fund an ethereum treasury, and dozens of others have followed suit. Yet despite billions flowing into these vehicles, crypto prices haven't moved much beyond what you'd expect from regular market forces. According to Youtube crypto analyst Ran Neuner, there's a counterintuitive explanation for this phenomenon. In his view, these companies aren't actually buying crypto off the open market in meaningful quantities. Ran argues they've become sophisticated vehicles for crypto natives to exit their positions at premium valuations while retail investors pay inflated prices for crypto exposure they could get cheaper elsewhere. The Original Crypto Treasury Playbook Microstrategy price as of July 2025. MicroStrategy created the original playbook. Back in 2020, before bitcoin ETFs existed, the company provided institutional investors a way to get leveraged bitcoin exposure through traditional capital markets. Michael Saylor's genius was using both debt and equity financing to tap into the $80 trillion traditional finance ecosystem, compared to crypto's then-$3 trillion market. The strategy worked brilliantly. MicroStrategy raised billions and accumulated 450,000 bitcoin by January 2025, making it the largest corporate bitcoin holder globally. The company trades at a premium to its net asset value because investors pay extra for the leverage component - the difference between what debt holders require as returns versus equity holders. But something changed after the bitcoin ETF launched. Institutional investors could now get direct bitcoin exposure without the MicroStrategy premium. Yet the treasury company trend accelerated rather than slowed down. The New Generation of Crypto Treasury Companies CANADA - 2025/05/01: In this photo illustration, the SharpLink Gaming logo is seen displayed on a ... More smartphone screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images) Recent examples show how the playbook evolved: SharpLink Gaming arranged a $425 million private placement specifically to buy ethereum, transforming from a sports betting technology company into an ethereum holding vehicle. Upexi raised over $300 million across multiple rounds in 2025 to accumulate 1.9 million Solana tokens worth approximately $380 million. GameStop issued $1.5 billion in convertible notes to purchase 4,710 bitcoin, with plans for additional debt offerings. Bit Origin announced plans to raise $500 million specifically for a dogecoin treasury. The pattern is consistent: companies pivot to crypto, announce massive fundraising rounds, and their stock prices surge on speculation. Why Crypto Treasury Prices Aren't Moving Crypto Markets NEW YORK, NY - MAY 13: Ran Neuner attends Consensus 2019 at the Hilton Midtown on May 13, 2019 in ... More New York City. (Photo by) Here's Neuner's key insight that most observers miss: these treasury companies aren't actually net buyers of crypto. They're simply redistribution mechanisms. Take SharpLink Gaming's ethereum deal. The $425 million didn't come from cash-heavy institutions looking to buy ethereum. It came from crypto investors who already held ethereum and wanted to exchange it for publicly traded shares at a premium. The process works like this, as Neuner describes it: In other words, crypto native investors (VCs, early adopters, institutions) contribute their existing crypto holdings to the treasury company and receive an equivalent mount in shares. But once the 'treasury' company is announced, the shares immediately trade at 2-4 times net asset value on public markets. Then, the crypto investors sell some shares to retail investors, recouping their original crypto investment and they're left with additional "free" shares representing their premium. It's essentially a way for crypto insiders to sell their holdings to traditional finance investors at a markup, without actually moving the underlying crypto markets or having to go through complex regulatory processes for old crypto assets of uncertain origin. The Crypto Treasury Numbers Don't Add Up for Real Buying Look at Upexi's trajectory. The company claims to have accumulated 1.9 million Solana tokens, but much of this likely came from discounted purchases of locked Solana at below-market prices, or direct contributions from crypto investors rather than open market purchases. As Ran Neuner explains, when you examine the investor lists for these treasury companies, they're populated by crypto-native funds like Arrington Capital, Electric Capital, and Pantera - firms that already hold massive crypto positions. "They all have ETH. So all they're doing is they're putting their ETH in the vehicle, they're getting the shares, they're getting shares at net asset value, the shares are opening at 20 times net asset value, they're cashing out the original investment," Neuner observes. The Ultimate Crypto Treasury Exit Strategy For wealthy crypto natives, Neuner argues, treasury companies solve several problems simultaneously: Liquidity: Large crypto holders can't easily sell billions without moving markets against themselves. Treasury companies let them "sell" to themselves at favorable valuations. Legitimacy: Converting crypto holdings into SEC-registered shares provides a cleaner asset class, potentially addressing regulatory concerns about the source of original crypto wealth. Tax advantages: Swapping crypto for shares of equivalent value may avoid capital gains triggers in many jurisdictions. Premium capture: Instead of selling crypto at market price, they effectively sell it at 2-4x through the treasury company structure. The Crypto Treasury Retail Trap As Neuner puts it: "Can you imagine you're paying $35,000 for an eth now where you can just go and buy at whatever the price is today on Coinbase." Retail investors buying these treasury company stocks are paying $3-4 for every $1 of underlying crypto value. They're betting that the shares will trade at even higher premiums, or that the underlying crypto will appreciate enough to justify the markup. This creates a dangerous leverage bubble built on speculation rather than genuine demand for the underlying assets. Each new treasury company announcement adds more leverage to the system without adding meaningful buying pressure to crypto markets. "The sooner it lands up bursting, the better because the longer it takes, the more leverage will be built up. The bigger this bubble, the bigger the smack may actually be," warns Neuner. Why the Crypto Treasury Bubble Will Burst History shows what happens to excessive leverage in crypto cycles. The 2017 cycle ended when ICO leverage collapsed. The 2021 cycle ended when algorithmic stablecoin leverage (Luna, FTX) unwound. As Neuner notes: "In every market, we're creating excess leverage into a system. We're not really adding any value or maybe we are by combining debt and equity, but there's no way that that value is equal to the crazy and ridiculous premiums that these companies are providing." When crypto markets turn bearish, these treasury companies will trade at discounts to net asset value rather than premiums. Retail investors who paid 3x for crypto exposure will see their investments collapse faster than the underlying crypto assets. The sooner this bubble deflates, the better. The longer it inflates, the more leverage builds up in the system, and the more painful the eventual unwind. The Real Impact of Crypto Treasury Companies on Crypto While treasury companies generate headlines and stock market volatility, Neuner contends their impact on actual crypto prices remains minimal. In his analysis, they're primarily vehicles for transferring crypto wealth from insiders to retail investors at inflated valuations, not mechanisms for driving new institutional adoption. Real crypto price discovery continues to happen in spot markets, through ETFs, and via genuine institutional adoption - not through the elaborate financial engineering of treasury companies trading at massive premiums to their underlying assets. The crypto treasury company phenomenon reveals more about market psychology and the hunger for leveraged crypto exposure than it does about genuine institutional demand for digital assets. Until investors recognize this distinction, they'll continue paying premiums for crypto exposure they could get more cheaply elsewhere.
Yahoo
14 hours ago
- Business
- Yahoo
SharpLink (SBET) Falls 12.89% on Profit-Taking
We recently published . SharpLink Gaming Inc. (NASDAQ:SBET) is one of the biggest losers on Monday. SharpLink Gaming extended its losing streak to a third consecutive day on Monday, losing 12.89 percent to close at $25.25 apiece as investors continued to take profits following last week's surge. On Wednesday last week, SharpLink Gaming Inc. (NASDAQ:SBET) announced that it is now the largest holder of Ethereum cryptocurrencies globally following the recent acquisition of 74,656 ETH, pushing its total ownership to 280,706. The assets were acquired between July 7 and 13 at a weighted average price of $2,852 each. The transaction also coincided with SharpLink Gaming, Inc.'s (NASDAQ:SBET) successful raising of $413 million through the issuance of more than 24 million shares At-The-Market between July 7 and 11. As of July 13, SharpLink Gaming, Inc. (NASDAQ:SBET) said approximately $257 million of the total proceeds have yet to be spent on ETH purchases. While we acknowledge the potential of SBET as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
SharpLink's Ether Bet Surpasses $1.3B After Latest Purchase
SharpLink Gaming (SBET), the ether (ETH) treasury company led by Ethereum co-founder Joseph Lubin, continued its buying spree bringing total holdings above $1.3 billion. The firm said in a Tuesday press release that it acquired 79,949 ETH over the last week at an average price of $3,238, its largest weekly purchase ever. With the latest acquisition, the firm held 360,807 ETH as of July 20, worth roughly $1.33 billion at current prices. The company still has $96.6 million of funds raised by selling shares through its at-the-market equity for more ETH purchases, the company said. SBET shares were 6% up in premarket trading even as ETH slipped 2.4% over the past 24 hours. SharpLink announced a pivot to a crypto treasury strategy centered on Ethereum in late May, taking a page of bitcoin-focused playbook of Michael Saylor's Strategy. Joseph Lubin, who is also the CEO of Ethereum development firm Consensys, joined the firm as chairman. The firm has quickly become one of the largest corporate owner ETH, the second-largest cryptocurrency by market cap, while operating validators and staking the tokens to earn a reward. Last week, it announced to raise the ATM facility to $6 billion to raise more funds by selling shares for ETH acquisitions. Lubin also praised the recent signing of the GENIUS Act by President Trump into law, calling the legislation a watershed moment that provides regulatory clarity for blockchain and digital assets in the U.S. "With the Genius Act now law, the regulatory uncertainty that has surrounded crypto innovation is finally easing," Lubin said in a statement. "We believe this ushers in a more supportive environment for companies like SharpLink to not onlyoperate and grow, but also to harness the full potential of Ethereum — including its security, scalability and smart contract utility — to drive profound, transformative change across the global digital economy."Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
Prediction: SharpLink's Ethereum Move Is Just the Beginning
Key Points A handful of publicly traded companies, including SharpLink Gaming, have now embraced the Ethereum treasury company model. Just like the Bitcoin treasury company model, it relies on raising money from investors to buy crypto. It remains to be seen if a strategy created for Bitcoin will be just as successful for Ethereum. 10 stocks we like better than Ethereum › Something very interesting is going on with Ethereum (CRYPTO: ETH) right now. Small, relatively unknown companies are starting to add Ether, the native coin of the Ethereum blockchain, to their balance sheets as part of a new strategy designed to lift their stock market valuations. And so far, it's working. Case in point: during the past 30 days, shares of SharpLink Gaming (NASDAQ: SBET) are up a whopping 150% (as of July 18). SharpLink Gaming has attracted so much attention with its new crypto strategy that it's almost certain to attract other companies as well. The Ethereum treasury company model In a very short time, SharpLink Gaming has become the largest corporate holder of Ether coins on the planet. It now holds 280,706 coins, worth about $960 million at recent prices. To put that figure into perspective, that's more Ether than even the nonprofit Ethereum Foundation holds. In early July, the company raised more than $400 million for its Ether war chest. After its latest buy in mid-July, it still has more than $250 million for future purchases, so it's likely that we'll be hearing more from SharpLink Gaming soon. If this strategy sounds familiar, that's because the Ethereum treasury company model is a replica of the Bitcoin (CRYPTO: BTC) treasury company model pioneered by Strategy (NASDAQ: MSTR), the company formerly known as MicroStrategy. The concept is very simple: Instead of using cash from operations to fund crypto purchases, you tap the capital markets for funding. Once you have this funding lined up, you go on a crypto buying spree. All of this works as long as the price of the cryptocurrency continues to go up. We've seen this work with Bitcoin, because the price of Bitcoin -- aside from a few pullbacks here and there -- has mostly gone up during the past 24 months. The same might be said for Ethereum, which is up 7% in 2025 (as of July 18) after registering losses for much of the year. It remains to be seen if Ethereum can deliver the same type of performance as Bitcoin, which is up 30% in the same period. The growth of Ethereum treasury companies For now, only a handful of publicly traded companies have adopted this strategy. Two other notable examples are Bitmine Immersion Technologies (NYSEMKT: BMNR) and Bit Digital (NASDAQ: BTBT). Both announced their pivots to this model in June. Now that the groundwork has been laid, it's easy to see how other companies could be tempted to jump in. The price of Ether is still only $3,600, which makes raising money from investors easier than raising money to buy Bitcoin at about $120,000. The lower barrier to entry is likely to be much more attractive for small-cap companies with relatively limited access to the capital markets. Should you invest in Ethereum treasury companies? Right now, I have mixed feelings about SharpLink Gaming, which is also a marketing partner for sports betting books and online casino operators. Just look at this chart, and you'll see why I think it's a risky gamble: In mid-2025, the company's stock had been flatlining. Nothing it did could get its stock price up. Until, of course, it latched on to the idea of investing in Ethereum. And I'm not very enthusiastic about Bitmine Immersion Technologies, either. Granted, it now has renowned investment strategist Tom Lee of Fundstrat as its chairman. That gives it a lot of power to reach out to investors for more capital. But what in the world is a Bitcoin mining company doing buying Ether? It doesn't make any sense to me. We can ask the same about Bit Digital, which is now winding down its Bitcoin mining operations. How can you be an evangelist for Ethereum when your core DNA is rooted in Bitcoin? That's why I'm starting to appreciate Strategy more and more these days. While Michael Saylor, the founder and executive chairman of the company, can be a bit over the top in his predictions, he's a strong evangelist for Bitcoin. I get the impression that, from the moment he wakes up to the moment he goes to bed, he's thinking about Bitcoin. That's the type of person I want running a crypto treasury company. So before you invest in an Ethereum treasury company, make sure you do your due diligence. Only a small handful of them may ever turn into long-term plays worthy of your investment. Should you invest $1,000 in Ethereum right now? Before you buy stock in Ethereum, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Ethereum wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 Dominic Basulto has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy. Prediction: SharpLink's Ethereum Move Is Just the Beginning was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
5 days ago
- Business
- Yahoo
SharpLink (SBET) Skyrockets 29% as Firm Now Largest Ethereum Holder
We recently published . SharpLink Gaming, Inc. (NASDAQ:SBET) is one of Wednesday's top performers. SharpLink Gaming extended its winning streak to a 7th consecutive day on Wednesday, jumping 29.03 percent to close at $37.38 apiece following news that it has become the largest holder of Ethereum cryptocurrencies globally. This followed the acquisition of 74,656 ETH last week, propelling its total ownership of the cryptocurrency to 280,706. The assets were acquired between July 7 and 13 at a weighted average price of $2,852 each. The transaction also coincided with SharpLink Gaming, Inc.'s (NASDAQ:SBET) successful raising of $413 million through the issuance of more than 24 million shares At-The-Market between July 7 and 11. As of July 13, SharpLink Gaming, Inc. (NASDAQ:SBET) said approximately $257 million of the total proceeds have yet to be spent on ETH purchases. Based on its historical earnings reporting dates, SharpLink Gaming, Inc. (NASDAQ:SBET) is slated to announce the results of its second quarter earnings performance in the second week of August 2025. While we acknowledge the potential of SBET as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
