Recently, there has been a significant event where 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 investment in public equity (PIPE) to raise $425 million to establish an Ethereum (ETH) reserve. This move has sparked a strong market reaction, with SBET's stock price skyrocketing over 1000% within a week and trading volume surging by 7200%.
SharpLink Gaming, Inc. (Nasdaq: SBET) is an online technology company headquartered in Minneapolis, Minnesota, USA.
Why transform? It's actually quite simple. I checked his financial data (2023), total revenue: $4.95 million, a year-on-year increase of 42%. Net loss: $11.25 million, a year-on-year decrease of 20%. So the company has been continuously losing money and couldn't manage. Previously, MicroStrategy was also the same; before transforming to hoard Bitcoin, it was also a loss-making company. But after purchasing Bitcoin, MicroStrategy is now the institution holding the most Bitcoin, currently holding approximately 580,955 Bitcoins, with a total investment cost of about $33.139 billion and an average purchase cost of $66,384.56 per Bitcoin.
Based on the current coin price (105,000 USD), it has already earned $22 billion ((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 dollars a year. In other words, just by buying Bitcoin, MicroStrategy has already earned the equivalent of 4000 years of its normal revenue.
Why is SharpLink imitating MicroStrategy to buy Ethereum?
1. Seeing MicroStrategy's successful transformation, it is definitely worth learning, especially since so many companies have started to imitate it.
And since its main business is losing money, it would be better to engage in crypto and earn passively!
So why not buy Bitcoin and instead buy Ethereum?
2. Currently, Bitcoin is at a high position, and even if Bitcoin rises to the market value of gold, it only has a 10x space (which is almost impossible in the short term). The funds raised this time are only $400 million, and based on the current Bitcoin price, it can only buy 4,000 coins. If there is a subsequent price drop, it would adversely affect future fundraising.
3. Ethereum is currently not at a new high, and it's only 2500, which is a long way from its all-time high. Currently, no company has started hoarding Ethereum, and he is the first mover. Conversely, buying Bitcoin only supports MicroStrategy, but if he buys Ethereum, then if others follow suit, he becomes the number one institution for hoarding Ethereum. If other institutions imitate him, they are just supporting him.
I wonder if there is any 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), the issuance of ETH has significantly reduced. However, with changes in network activity and increased staking participation, the issuance has also been 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 new issuance of about 3,477,831 ETH, which is equivalent to $8.6 billion at the current coin price. The reason for the recent inflation increase is that high gas fees have led many developers and project parties to choose other high-speed public chains with lower gas fees, and on-chain activity itself is not active during bear markets.
So is the current 0.8% inflation problem significant? I don't think so, because you can calculate that Bitcoin's inflation is also around 0.8% (with a daily output of 450). However, Bitcoin's output has a cost, while Ethereum's output has no cost. And no cost means miners are more likely to sell rather than hold.
Although the current data for Ethereum ETFs and Bitcoin ETFs is very different (Ethereum ETF total is 10 billion, Bitcoin ETF is 100 billion), more and more people will see the value of Ethereum.
And since institutions have started hoarding Ethereum, which other coins might be favored by institutions? Please leave your comments.