A hefty bet of 700 million on Ethereum! Why has this gaming company transformed into a crypto Whale?

Original author: Editor Jr

Reprinted: Daisy, Mars Finance

special

SharpLink Gaming (SBET), a publicly traded company involved in online gaming and sports betting marketing, announced yesterday (24th) that after spending $463 million to purchase 176,271 Ether (ETH) on June 14, it had again announced that it purchased 12,207 ETH at an average price of $2,513 during the period from June 16 to 20, spending a total of $30.67 million.

SharpLink Gaming's Ethereum holdings reach 188,000 coins.

After this increase, SharpLink Gaming's total holdings of Ethereum have reached 188,478 ETH, making it the company with the most Ethereum holdings among publicly traded companies.

Additionally, the funds for this increase primarily come from the sale of 2,547,180 shares of common stock through the ATM mechanism, which raised 27.7 million USD. Currently, the company has staked all of its ETH for proof of stake and has received 120 ETH in rewards since June 2, attempting to strengthen cash flow through staking rewards.

SharpLink Gaming's stock price has slightly rebounded.

According to data from Google Finance, SharpLink Gaming stock (SBET) rose by 8.77% after the U.S. stock market opened on June 24th, Taiwan time, currently priced at $9.8, with a market capitalization of approximately $594 million.

However, it is worth noting that after SharpLink Gaming announced a significant investment to establish an Ethereum strategic reserve, its feasibility was questioned by the market, and the stock price plummeted from $80 to $9.21 at one point. Currently, there is still a considerable distance for the stock price to return to its previous high.

Can SharpLink Gaming stock return to its previous high?

The main reasons for the significant decline in SharpLink Gaming's stock price previously include:

Market Misunderstanding and Panic: The S-3 filing registered 58.7 million shares for potential resale, leading investors to mistakenly believe that insiders were about to sell shares, triggering panic selling pressure. Although company executives clarified that this is a standard procedure and there are no actual sales of shares, market confidence is unlikely to recover in the short term.

Ethereum Price Volatility: SharpLink Gaming ties its company value to Ethereum, which has greater price fluctuations compared to Bitcoin. The current market sentiment towards cryptocurrencies is relatively weak, affecting investor confidence in the company's strategy.

However, some analysts point out that SharpLink Gaming's stock price may still have the potential for a significant rebound in the future, specifically because:

Long-term bullish outlook for Ethereum: SharpLink Gaming holds and stakes Ethereum, expecting to generate stable returns. Analysts predict that the price of Ethereum may rebound to the range of $4,000 to $5,000 by 2025, which, if realized, would significantly enhance the company's asset value and drive up the stock price.

Market misunderstandings are gradually fading: the panic triggered by the S-3 filing is a short-term emotional reaction, and company executives have actively clarified the situation, with no evidence of large-scale stock selling. As the market gradually digests this information, investor confidence may stabilize, driving a rebound in stock prices.

The success of SharpLink Gaming's Ethereum reserve strategy is analogous to the Bitcoin strategy of MicroStrategy, which has seen its stock price reach new highs after holding onto its assets for the long term. If market sentiment for Ethereum improves, SharpLink Gaming may replicate a similar path, attracting institutional investors to enter the market.