SharpLink Just Bought 10,000 Ethereum and Sent Its Stock Soaring. Here's What Investors Need to Know.

Key Points

• SharpLink Gaming has transformed into an Ethereum treasury company with one primary purpose: Buy as much Ethereum as quickly as it can.

• SharpLink is now the largest corporate holder of Ethereum in the world, with plans to hold 1% of all Ethereum in circulation.

• While SharpLink stock is still up 370% for the year, some of the initial enthusiasm appears to be cooling as new competitors appear.

• 10 stocks we like better than Ethereum ›

On July 11, SharpLink Gaming (NASDAQ: SBET) purchased 10,000 Ethereum (CRYPTO: ETH) from the Ethereum Foundation, marking the largest-ever direct Ethereum purchase by a publicly traded company. At today's prices, that Ethereum is now worth an estimated $36 million.

But it's not just the size of the deal that has investors abuzz. It's also the fact that SharpLink has gone all-in on its new Ethereum buying strategy, even going so far as to add Joe Lubin, one of the co-founders of Ethereum, as its chairman. Perhaps not surprisingly, the price of SharpLink stock is now up 370% for the year. Here's what you need to know.

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SharpLink goes all-in on Ethereum

In the span of just two months, SharpLink Gaming has turned its business model upside down and inside out. Until May 2025, the company was an affiliate marketer for sportsbooks and online casino operators. Hence the ticker symbol featuring the word "bet."

But, at the very end of May, the company announced that it would raise as much as $1 billion from investors in order to purchase Ethereum. The average price for the Ethereum purchased from the Ethereum Foundation was just $2,572. So, with the current price now $3,600, the company has already made a huge profit on this purchase.

The company immediately went back into the market, and has been steadily buying more Ethereum throughout July. In fact, it just announced that it will now buy $6 billion worth of Ethereum, a mammoth increase from the $1 billion originally proposed. The ultimate goal is to build its treasury to 1 million.

Currently, the company holds over 280,000 tokens in its treasury, easily making it the largest corporate holder of Ethereum in the world. It even holds more Ethereum than the Ethereum Foundation. If it manages to boost its holdings to 1 million Ethereum as planned, then it would control just under 1% of all Ethereum in circulation.

What investors need to know

All of this buying is part of a broader strategy designed to transform SharpLink Gaming into a powerful Ethereum treasury company. Over time, the company will shed its betting and casino marketing operations, and focus instead on buying Ethereum and supporting the Ethereum ecosystem.

Image source: Getty Images.

This is the same strategy originally developed for Bitcoin (CRYPTO: BTC) by MicroStrategy (NASDAQ: MSTR), now doing business as Strategy. Over a five-year period, Strategy has become the largest corporate holder of Bitcoin in the world. Its stock price has been absolutely on fire as a result. Over the past five years, the stock price of Strategy is up a head-spinning 3,715%.

So you can see what's going on here. The goal of SharpLink is to become "the Strategy of Ethereum." There are several publicly traded companies vying for this title, but it now looks like SharpLink Gaming has the inside track. Not only does it own more Ethereum than anyone else, it also has Ethereum rock star Joe Lubin as chairman.

Is SharpLink a buy?

Based on the above, the obvious conclusion would appear to be that SharpLink Gaming is a strong buy. As soon as the company purchased the 10,000 tokens, for example, its stock price immediately spiked by 50%. For the year, the company's stock is up 370%. What's not to like?

Unfortunately, there's something about SharpLink that the market doesn't like. The company's stock is actually down more than 50% since the end of May, when it first embarked on its Ethereum journey.

If you take a quick look at the company's stock chart, you'll see what's going on here. Intense investor enthusiasm has been followed by intense investor disappointment. Right now, the market seems to be having a hard time valuing SharpLink.

There are several problems here. The first and most glaring one is that SharpLink is a money-losing operation. When the company last reported earnings, revenue was down 24% year over year. And net profit was down 110%. And its stock price had been going nowhere fast for months. So, in some ways, this new push into Ethereum feels like a desperation move.

The second problem is that there are other companies also racing to become "the Strategy of Ethereum." The hot name that everyone is talking about right now is Bitmine Immersion Technologies (NYSEMKT: BMNR), a Bitcoin mining company that is transforming into an Ethereum treasury company with the support of tech billionaire Peter Thiel.

So I'm not quite ready to pull the trigger on SharpLink Gaming. I'd much rather buy Ethereum directly, and take my chances there. There are fewer variables to worry about, and less concern about the arrival of new deep-pocketed competitors in the Ethereum treasury company game.

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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.