SharpLink Gaming posts \$103M Q2 loss despite building second-largest ETH treasury

SharpLink Gaming announced its Q2 results, alongside its record efforts to build the second-biggest ETH treasury. SBET shares fell by over 10% on a larger-than-expected quarterly loss. 

SharpLink Gaming (SBET) shares sank by over 10% to $20.48 following a larger-than-expected loss for Q2. SBET’s direction also coincided with a drop in BitMine (BMNR) shares, down over 7% for the past day to $56.16.

SBET shares sank after the company announced $103M in quarterly losses for the period ended July 31. The loss followed one of the most active periods for ETH acquisition, where SharpLink Gaming drew attention to itself as the largest established corporation to start an ETH treasury. SharpLink was also among the first companies to claim adherence to Strategy’s BTC playbook.

SharpLink announced $0.7M in revenues for Q2, compared to $1M for the same period of 2024. Gross profit was $0.2M, or around 30% of revenue. The company also had larger expenses of $2.3M, versus $1.5M for Q2, 2024.

For the whole of Q2, the company posted $103M net loss, compared to $0.5M for the same period in 2024.

SharpLink posts impairment due to LSETH crash in Q2

The company also took a non-cash impairment of $87.8M on liquid staked ETH (LSETH) due to a drop in LsETH prices during Q2. The impairment was mandatory to report and was among the chief reasons for the loss. SharpLink Gaming is one of the treasury companies aiming for passive income from its ETH, hence its exposure to liquid staking tokens. 

LSETH has since recovered and trades at a premium of $4,865.39, though for accounting purposes, SharpLink had to take the lowest LSETH price for the period. As of Q2, SharpLink reported its LSETH value at $382.4M. 

Due to accounting requirements, SharpLink had to report the impairment at $2,300 per LSETH. However, no LSETH was sold or redeemed during the period. The treasury remains staked, despite the recent shift in LidoDAO deposits and redemptions. 

SharpLink adds to ETH treasury

The competition to add more ETH to treasuries continues, with SBET adding more coins in the past days. 

Corporate treasuries already expanded to 3.70M ETH, with growth going vertical in August. SharpLink Gaming still has the second-biggest treasury at $728.8K, behind BitMine’s reserves of 1.2M ETH. 

On August 15, SharpLink added another 129.7K ETH, its biggest single purchase so far. The new purchases are a sign of increased confidence in ETH, which may lead to an additional recovery for SBET market prices. 

Over the last quarter, SharpLink managed to raise $2.6B during a market favoring the new treasury companies. Q2 saw peak fundraising attempts by the company, a combination of PIPE, ATM, and Registered Direct Offerings. 

While SharpLink’s treasury is not the biggest, the company aims to differentiate itself through partnerships. ConsenSys is one of the main partners for ETH transfers. Additionally, nearly 100% of all ETH acquired is staked, achieving cumulative rewards of 1,326 ETH to date. 

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