Ethereum (ETH) slid 2% in Saturday's trading session after SharpLink Gaming (SBET) reported a quarterly loss of up to $103 million, even though the company had just expanded its treasury with 728,000 ETH.
SharpLink lost $103 million amid the expansion of its Ethereum treasury.
In the first quarter financial report since shifting to an Ethereum accumulation strategy in May, eSports marketing company SharpLink Gaming reported that its asset holdings had surpassed 728,000 ETH, valued at over $3.2 billion at the time of publication. Notably, 'almost all' of this ETH was staked to participate in securing the Ethereum network, yielding 1,326 ETH in rewards in just a short time.
"Since implementing the strategy, we have quickly raised a large amount of capital and expanded our ETH holdings in a way that creates sustainable added value," CEO Joseph Chalom emphasized.
However, behind those impressive numbers, SharpLink still reported a net loss of $103 million in the period from April to June, a sharp reversal from the profit in the same period last year. Revenue in the second quarter also decreased by 30% year-on-year, reaching only $0.7 million.
The company explained that the loss mainly came from non-cash asset impairment costs amounting to $87.8 million, applied to the amount of ETH being staked. According to U.S. GAAP accounting standards, SharpLink is required to recognize the lowest price at which ETH was traded in the second quarter — around $2,300.
"It should be noted that this is just an accounting loss, entirely non-cash. We have not sold or converted any LsETH assets," SharpLink emphasized in the report.
Immediately after the announcement, SharpLink's stock plunged 15%, closing Friday at $19.85.
Since the Ethereum accumulation trend began to spread in June, companies pursuing this strategy have collectively accumulated more than 2.7 million ETH, with BitMine Immersion (BMNR) leading the way with 1.2 million ETH.
Ethereum price forecast: ETH falls below $4,500, heading towards $4,100.
Ethereum has lost the important support level of $4,500 after a failed attempt to reclaim the $4,700 zone. This drop wiped out $169 million in futures positions within 24 hours, of which $130 million belonged to long positions, with the remainder being short, according to data from Coinglass.
The largest altcoin in the market can currently find support around $4,100 — a price level that has acted as resistance multiple times over the past year. However, if this level is lost, ETH risks falling deep to $3,500, where it is supported by both the 50-day EMA and SMA.
Technical signals also indicate a marked cooling: The RSI and Stochastic Oscillator (Stoch) indices have both moved out of the overbought zone, with the RSI currently retesting the moving average line. This move reflects the familiar adjustment rhythm when the market becomes too hot.
However, the long-term picture is not yet closed. If ETH can break through and reclaim the historical peak of $4,868, the bearish scenario will be invalidated, opening up opportunities for a new attack towards the psychological milestone of $5,000.
