SharpLink announces a $1.5 billion plan: Smart leverage or a gamble with Ethereum?

SharpLink Gaming – the company that owns a $3.4 billion Ethereum treasury (740.760 $ETH ) – has just approved a plan to buy back SBET shares worth up to $1.5 billion. Although it has not disclosed the source of funding and implementation timeline, this move is seen as an effort to keep the stock price higher than the value of ETH in the treasury.

The controversial point is whether #SharpLink has to sell ETH to raise funds for the buyback, as the company was previously rumored to have "sold shares to accumulate ETH". Some opinions suggest this is a strategy to bolster shareholder confidence, while many investors worry it is just a double-risk gamble: if ETH decreases in value, both the treasury and SBET shares will be under pressure.

The situation is heated as BitMine – a competitor also building an ETH treasury – is applying a similar strategy, while the market has just witnessed Windtree Therapeutics (BNB treasury) being delisted from Nasdaq.

The community is questioning: where does the money #Buyback come from? Discussed scenarios include selling ETH, taking on debt, raising PIPE, collateralizing ETH for DeFi loans, or using staking yields. Each option carries its own capital costs and risks.

Nevertheless, SharpLink asserts that the buyback is only a "mandate", not necessarily to be executed immediately, but allows the company to act quickly when shares fall significantly below net asset value (NAV).

👉 This buyback plan could be a lever to help SBET surge if the market is favorable, but it could also turn into a big gamble if ETH plummets. #image