Written by: Christopher Rosa
Translated by: Saoirse, Foresight News
Michael Saylor's innovative strategy at MicroStrategy (now Strategy, stock code MSTR) is groundbreaking. He significantly increased Bitcoin holdings using financial instruments, triggering a trend among enterprises to follow suit. Since then, more than 50 companies have emulated his Bitcoin-centric capital reserve strategy, and this number continues to rise. However, today, a group of visionary companies is taking a different path: they not only pursue exposure to cryptocurrencies but also focus on forming a deep alignment with Ethereum's own economic engine.
In this report, we will focus on the first four U.S. listed companies that have established Ethereum reserves, analyze their financing activities, assess their 'Ethereum Concentration' (i.e., the amount of Ethereum held per share), and dissect the market premium assigned by investors to these companies' capital reserves backed by Ethereum. In addition to the above metrics, we will explore the broader implications of this phenomenon on the health of the Ethereum network, the staking ecosystem, and DeFi infrastructure, emphasizing that these capital reserve strategies not only reshape corporate balance sheets but also inject capital directly into the core areas of Ethereum's decentralized economy.
SharpLink Gaming (SBET)
Company Background
SharpLink Gaming Ltd. (NASDAQ: SBET) was founded in 2019 and is a technology company. It matches sports enthusiasts with timely sports betting and interactive gaming services through its proprietary platform, converting them into betting users. Additionally, the company develops free games and mobile applications and provides marketing services for sports media agencies, leagues, teams, and gaming operators to deepen fan engagement. Furthermore, SharpLink operates real-life fantasy sports and simulation games, with over 2 million users and an annual consumption of nearly $40 million. At the same time, the company has obtained operating licenses in all U.S. states that allow fantasy sports and online gambling to operate legally.
Last month, SharpLink began accumulating Ethereum (ETH) on its balance sheet and financed these acquisitions through a combination of private equity investments (PIPEs) and market offerings (ATM). The company's management team stated that this strategic shift stems from their strong confidence in Ethereum's future, believing that as a yield-generating and programmable digital asset, it allows the company to profit from staking and related yield opportunities. Despite adopting this novel financial strategy, SharpLink remains fully focused on its core gaming and interactive betting business, with the Ethereum capital reserve strategy serving as a supplement rather than a replacement for its core operations.
Financing and Ethereum Acquisition Status
The funds raised by SharpLink through equity financing in 2025 have been steadily used to purchase over 215,634 Ethereum, indicating that the company is rapidly transitioning to an Ethereum-supported capital reserve model.
Ethereum Deployment and Staking
SharpLink has staked all of its Ethereum reserves, earning a reward of 100 Ethereum during the period from June 28 to July 4, and has accumulated a total staking yield of 322 Ethereum since the staking program began on June 2.
Key Points
SharpLink Gaming's strategic move into Ethereum has made it the currently listed company with the largest Ethereum reserves. Through multiple rounds of equity financing (including a $425 million large private equity investment and subsequent market offerings), the company has rapidly accumulated the largest Ethereum holdings in the industry. Although this capital reserve strategy carries risks (including the impact of Ethereum price volatility), it also contains substantial staking yield potential, highlighting the appeal of proof-of-stake digital assets as capital reserves. By staking 100% of its Ethereum reserves, SharpLink not only earns revenue but also directly contributes to the security and stability of the Ethereum network. This diversity of validator participation enriches the ecosystem while creating synergy between corporate capital and healthy protocol development.
BitMine Immersion Technologies (BMNR)
Company Background
BitMine Immersion Technologies Inc. (NYSE American: BMNR) is a blockchain infrastructure company headquartered in Las Vegas, engaged in operating industrial-grade Bitcoin mining facilities, selling immersion cooling hardware, and providing hosting services for third-party mining equipment in low-energy-cost regions such as Texas and Trinidad.
On June 30, the company raised approximately $250 million through a private placement of 55.6 million shares (priced at $4.50 per share) to expand its Ethereum reserves. As part of the transaction, Fundstrat co-founder Tom Lee was appointed as the chairman of BitMine's board, adding the guidance of a seasoned cryptocurrency strategy expert to bolster the company's Ethereum allocation.
Financing and Ethereum Acquisition Status
In late June, after completing a $250 million private placement, BitMine Immersion Technologies underwent a revaluation of its stock price, highlighting that the company is shifting towards an Ethereum-supported capital reserve model.
Ethereum Deployment and Staking
BitMine holds a large amount of Ethereum reserves, but as of the writing of this article, there is no public information confirming whether any of the reserves have been actively staked or deployed on-chain in other ways.
Key Points
Through $250 million financing, BitMine has added approximately 81,380 Ethereum to its balance sheet, bringing its total holdings to over 163,000 Ethereum. To support this reserve accumulation, BitMine has expanded its diluted share capital to over 56 million shares, increasing by about 13 times. This scale of dilution highlights that implementing a large-scale Ethereum reserve strategy requires substantial equity issuance support, while also reflecting the capital-intensive nature of accumulating Ethereum in the public market.
Bit Digital (BTBT)
Company Background
Bit Digital Inc. (NASDAQ: BTBT) is a digital asset platform headquartered in New York, founded in 2015, initially operating industrial-grade Bitcoin mining facilities in the United States, Canada, and Iceland.
In June 2025, the company completed a fully underwritten public offering, raising approximately $172 million; at the same time, it will merge the funds obtained from selling 280 Bitcoin with the proceeds from the offering to reinvest in Ethereum, cumulatively holding approximately 100,603 Ether. Under the leadership of CEO and cryptocurrency veteran Sam Tabar, the company has completed its transition to the Ethereum staking and capital reserve model.
Financing and Ethereum Acquisition Status
The chart traces the entire process of Bit Digital's equity financing from June to July, the sale of 280 Bitcoin, and the reinvestment of these funds into over 100,000 Ethereum, highlighting the company's transition towards an Ethereum-centric capital reserve model.
Ethereum Deployment and Staking
As of March 31, Bit Digital held approximately 24,434 Ethereum, of which 21,568 were actively staked, with an average annualized yield of 3.2% for Ethereum staking in 2024.
After the strategic adjustment, Bit Digital significantly expanded its Ethereum reserves through public offerings and the sale of Bitcoin, increasing its total holdings to 100,603 Ether. Although the company has not disclosed the specific staking amount and expected returns after the transition, based on past operations, it will continue to focus on generating revenue through Ethereum staking.
Key Points
The transformation of Bit Digital's capital reserves is particularly noteworthy: it combines traditional public equity financing with the unconventional move of liquidating Bitcoin holdings to purchase Ethereum. This strategy makes Bit Digital stand out among publicly listed cryptocurrency companies, demonstrating its strong confidence in Ethereum's revenue generation capabilities. Compared to Bitcoin's passive role on the balance sheet, Ethereum's advantages are more pronounced.
GameSquare (GAME)
Company Background
GameSquare Holdings (NASDAQ: GAME) is a gaming media group headquartered in Texas, owning brands such as FaZe Clan, Stream Hatchet, and GCN, focused on creating creator-led marketing content for global advertisers targeting Gen Z gamers. In July, the company raised approximately $8 million through a follow-on equity offering and launched an Ethereum capital reserve plan in collaboration with cryptocurrency company Dialectic, with a maximum allocation of $100 million in Ethereum and a target return of 8% to 14%.
Financing and Ethereum Acquisition Status
The table summarizes the details of GameSquare's initial public equity financing, which aims to provide funding support for its Ethereum reserve strategy launched in collaboration with Dialectic.
Ethereum Deployment and Staking
As part of a broader digital asset reserve strategy, GameSquare has completed its first Ethereum purchase, acquiring $5 million worth of Ether. This move marks the company's official entry into the cryptocurrency reserve space, aiming to diversify its assets and support long-term innovation.
Key Points
GameSquare's shift to an Ethereum capital reserve strategy represents a bold expansion beyond its core gaming media business. Through collaboration with Dialectic and leveraging its Medici platform, GameSquare plans to invest funds in the DeFi space to achieve returns significantly higher than the standard Ethereum staking yield (typically 3% to 4%), aiming for returns of 8% to 14%. If this strategy is successfully implemented, it will directly support the stability and development of the entire Ethereum ecosystem by enhancing the liquidity of key DeFi protocols and enriching the structure of validator participation. The active involvement of corporate capital will further solidify the foundation of DeFi infrastructure.
Ethereum Concentration (ETH Concentration)
The 'Ethereum Concentration' metric was initially proposed by SharpLink Gaming, providing investors with a clear and comparable measure to assess the exposure of publicly listed companies building Ethereum reserves. This metric focuses on the 'amount of Ethereum held per 1,000 diluted shares outstanding,' and includes all potential equity dilution factors such as warrants, stock options, and convertible instruments in its calculations. The displayed Ethereum holding data comes either from direct company disclosures or is estimated based on their announced equity financing fully invested in Ethereum. The diluted share count is derived from company filings, Bloomberg, SEC documents, and financial databases to ensure consistency and accuracy of data across different companies. This metric provides investors with an intuitive tool to assess relative Ethereum exposure levels from a per-share perspective.
The table compares the 'Ethereum Concentration' of publicly listed companies adopting Ethereum reserve strategies, indicating the number of Ethereum held or planned to be held per 1,000 diluted shares.
Market Capitalization Premium and Book Value of Ethereum Reserves
Comparative analysis of the market capitalization premium of publicly listed companies and the book value of their Ethereum holdings.
The chart above illustrates the relationship between the market capitalization of various companies and the book value of their Ethereum holdings (calculated as 'total Ethereum held × $2,600 cost per unit'). The higher the premium multiple, the more it indicates that investors have valued the company's strategic flexibility or future earnings well beyond the intrinsic value of their underlying Ethereum assets. GameSquare (GAME) ranks first with a premium of about 13.8 times, highlighting the market's high optimism regarding its early Ethereum reserve building; BitMine (BMNR) has a premium of about 5 times after completing its latest $250 million financing; the premiums of Bit Digital (BTBT) and SharpLink (SBET) are relatively moderate, reflecting more restrained market expectations. However, like all cryptocurrency reserve strategies, a significant decline in Ethereum prices could exacerbate downside risks due to excessively high premiums.
Comparison of Ethereum and Bitcoin Reserve Models
The rise of Ethereum reserves marks a significant strategic evolution for publicly listed companies focused on cryptocurrency business. The Bitcoin model is often centered around 'digital gold,' emphasizing the passive preservation or appreciation of reserves; whereas Ethereum goes a step further, creating active yields through staking and DeFi strategies, which adds extra appeal.
All four companies have explicitly designated Ethereum as a yield-generating reserve asset. SharpLink and BitMine have committed (or plan) to stake 100% of their Ethereum holdings to maximize the rewards from protocol-level staking; GameSquare, through its collaboration with cryptocurrency company Dialectic, seeks risk-adjusted returns of 8%-14% by employing more complex DeFi strategies, deepening this model. This preference for 'yield-generating Ethereum' sharply contrasts with Bitcoin reserves' 'passive model that generates no yield,' marking a shift in corporate capital management from simple reliance on asset price appreciation to achieving balance sheet growth through proactive operations.
Unlike many Bitcoin reserve companies that heavily rely on convertible bonds and leverage (see Galaxy's latest research report), the four leading Ethereum reserve companies—SharpLink, BitMine, Bit Digital, and GameSquare—have entirely financed their Ethereum reserves through equity offerings. This means they do not have to bear the pressure of debt maturity, interest payment obligations, and there is no default risk even in a downward cryptocurrency market. The non-leveraged model significantly reduces systemic vulnerabilities, avoiding the refinancing and equity dilution risks associated with deeply in-the-money convertible bonds.
The key point is that these Ethereum reserve strategies introduce a structural innovation: productive capital. By staking Ethereum, these companies can not only earn the typical 3%-5% protocol-native yield but also directly contribute to the security and stability of the Ethereum network. The higher the amount of Ethereum staked by the enterprise, the more stable and predictable the network validator ecosystem becomes, creating a long-term synergy between corporate capital and healthy protocol development.
Indeed, as of July 9, the amount of Ethereum staked has reached a historical peak (over 35 million units, accounting for more than 30% of total supply), and the rise of Ethereum reserve companies may be one of the key drivers behind this trend.
Taking GameSquare as an example, it plans to promote yield enhancement strategies through partners like Dialectic, deploying Ethereum reserves into lending, liquidity provision (market making), and re-staking, among other DeFi native foundational businesses. This not only amplifies potential returns but also strengthens the ecological foundation of the Ethereum core protocol by enhancing liquidity and attracting institutional participation in decentralized markets.
Who Will Face the Greatest Risk of Equity Dilution?
The image compares the effects of private equity investment (PIPE), market offerings (ATM), and public stock issuance on equity dilution, highlighting which companies face the greatest short-term risks.
Investors should exercise caution in evaluating the behavior of equity financing that adds new stock to the market, especially in private equity investment public offerings (PIPEs), which can dilute existing shareholders' equity and exert pressure on stock prices. BitMine's large PIPE issuance exposes it to significant dilution risk and stock price volatility in the short term; SharpLink's combined PIPE and ATM financing method can cause immediate dilution and bring ongoing incremental pressure. In contrast, Bit Digital and GameSquare adopt more transparent traditional public issuance methods, where dilution is clear and controllable, and market risks are relatively lower.
Overall, companies that choose the PIPE structure face higher initial market impact risks compared to market offerings (ATM) and traditional public offerings (especially during periods of market volatility). However, all these equity-centric financing strategies have avoided the 'high-leverage convertible bond' characteristics relied upon by Michael Saylor at MicroStrategy.
Conclusion
At first glance, the dramatic volatility of stocks related to Ethereum reserves may seem similar to the 'speculative boom and bust cycles' common in meme coins, but the strategies adopted by the first companies to lay out Ethereum reserves exhibit essential differences. These companies do not rely on hype or passive asset holding; rather, they position Ethereum as a 'productive reserve asset' that generates native yield through staking or, in some cases, engages in more complex DeFi strategies. This characteristic sharply contrasts with the pioneers of Bitcoin reserves: the latter follows a 'passive digital gold' model and often finances holdings through highly leveraged convertible bonds. In contrast, the four Ethereum reserve companies—SharpLink, BitMine, Bit Digital, and GameSquare—fully support their strategy implementation through equity financing, thus avoiding the structural vulnerabilities caused by debt maturity pressure and interest payment obligations.
Moreover, this capital is not sitting idle. By staking Ethereum, companies directly contribute to the security of network validators and the stability of the protocol layer; companies like GameSquare, which plan to deploy DeFi-native yield strategies, may invigorate Ethereum's foundational infrastructure with reserve capital for liquidity provision, lending markets, and more.
Despite the ongoing challenges of dilution risk, smart contract exposure, and price volatility, investors can comprehensively assess downside risks and upside potential driven by returns through tools such as dilution impact analysis and price-to-book value ratios. Ultimately, this first batch of Ethereum reserve models demonstrates a more deeply engaged, productivity-driven approach to capital operations. Although it has given rise to a class of on-chain corporate reserves exposed to market volatility, this model may still inject momentum into the strengthening of the Ethereum ecosystem.
Disclosure: As of the date of this report, associated entities of Galaxy Digital are currently invested in BitMine and SharpLink Gaming.
