Recently, a significant event occurred: the US listed company SharpLink Gaming (NASDAQ: SBET) announced plans to issue 69.1 million shares of common stock at a price of $6.15 per share through a private placement (PIPE) to raise $425 million for establishing an Ethereum (ETH) reserve. This move has sparked a strong reaction in the market, with SBET's stock price soaring over 1,000% in a week and trading volume increasing by 7,200%.
SharpLink Gaming, Inc. (NASDAQ: SBET) is an online technology company based in Minneapolis, Minnesota, USA.
Why the transformation? It’s actually quite simple. I checked his financial data (2023), total revenue: 4.95 million US dollars, a year-on-year increase of 42%. Net loss: 11.25 million US dollars, a year-on-year decrease of 20%. So the company has been losing money and cannot operate. Previously, MicroStrategy was also similar; before it transformed and started hoarding Bitcoin, it was also a loss-making company. But after purchasing Bitcoin, MicroStrategy currently holds the largest amount of Bitcoin among institutions, with about 580,955 Bitcoins held, a total investment cost of about 33.139 billion US dollars, and an average purchase cost of 66,384.56 US dollars per Bitcoin.
Based on the current coin price (105,000 US dollars), it has already earned 22 billion US dollars ((10500-66384)*580,000).
What is this concept? I checked the revenue situation of MicroStrategy after 2020, and it was only about 4-5 million US dollars a year. That is to say, just by buying Bitcoin, MicroStrategy has already earned the equivalent of its normal revenue for 4,000 years.
Why does SharpLink imitate MicroStrategy to buy Ethereum?
1. Seeing MicroStrategy's successful transformation, it is definitely something to learn from, especially since so many companies have started to imitate it.
And since its main business is losing money, it’s better to engage in crypto and earn passively!
So why buy Ethereum instead of Bitcoin?
2. Currently, Bitcoin is already at a high level, and even if Bitcoin rises to the market value of gold, it only has a 10x space (which is very difficult in the short term), while the funds raised this time are only $400 million, which at the current Bitcoin price can only buy 4,000 coins. If the price drops later, it would be detrimental to further fundraising.
3. Currently, Ethereum's price is not at a new high, and it's only 2,500, which is still a long way from the new high. No company has started hoarding Ethereum yet, and he is the first to take the plunge. On the contrary, buying Bitcoin would only help MicroStrategy, but if he buys Ethereum, then if someone copies him later, he will be the NO1 institution for hoarding Ethereum, and other institutions imitating him will just be helping him.
Do I think there is a risk in hoarding Ethereum?
1. Ethereum's inflation
Currently, the biggest risk for Ethereum is inflation risk, because after Ethereum transitioned from proof-of-work (PoW) to proof-of-stake (PoS) mechanisms, the issuance of ETH has decreased significantly. However, with changes in network activity and increased staking participation, the issuance has also adjusted.
Daily issuance: approximately 1,700 ETH
Annual issuance: approximately 620,500 ETH (based on 2023 data)
Annual inflation rate: approximately 0.52% (based on 2023 data)
However, the latest data shows that as of April 13, 2025, the annual inflation rate of ETH has risen to approximately 0.805%, with an annual added issuance of about 3,477,831 ETH. At the current coin price, that amounts to 8.6 billion US dollars. The reason for the recent inflation increase is the high gas fees, which have led many developers and projects to choose other high-speed public chains with lower gas fees. Additionally, on-chain activity has been inactive during the bear market.
So is the current 0.8% inflation issue significant? I don't think it is, because you can calculate that Bitcoin's inflation is also around 0.8% (with a daily output of 450 coins), but Bitcoin's output has a cost, while Ethereum's output has no cost. And no cost means that miners are more likely to sell rather than hold.
Although the current data for Ethereum ETFs and Bitcoin ETFs differs greatly (the total amount of Ethereum ETFs is 10 billion, while Bitcoin ETFs is 100 billion), more and more people will definitely see the value of Ethereum.
And since institutions have started hoarding Ethereum, what other coins might attract institutional interest? Please leave your comments.