Today let's talk about Ethereum. Recently, there was a significant event where the US listed company SharpLink announced plans to raise 425 million USD through a private placement (PIPE) by issuing 69.1 million shares of common stock at a price of 6.15 USD per share to establish a reserve fund for Ethereum (ETH). This move triggered a strong market reaction, with SBET's stock price soaring over 1000% within a week and trading volume surging by 7200%.
SharpLink is an online technology company based in Minneapolis, Minnesota, USA, focused on providing performance-driven marketing solutions for the sports betting and online gambling (iGaming) industry.
Why transform? It's actually very simple. I checked their financial data (2023), total revenue: 4.95 million USD, a year-on-year increase of 42%. Net loss: 11.25 million USD, a year-on-year decrease of 20%. So the company has been losing money and cannot continue. Previously, MicroStrategy was the same; before transitioning to hoarding Bitcoin, it was also a loss-making company. But after purchasing Bitcoin, MicroStrategy is currently the institution holding the most Bitcoin, with about 580,955 Bitcoins held, at a total investment cost of about 33.139 billion USD, with an average purchase cost of 66,384.56 USD per Bitcoin.
Based on the current coin price (105,000 USD), it has already earned 22 billion USD ((10500-66384)*580,000).
What is this concept? I checked MicroStrategy's revenue situation after 2020, and it was only about 4-5 million USD a year. This means that just by buying Bitcoin, MicroStrategy has already earned the equivalent of 4000 years of its normal revenue.
So what is the company doing? Just fire all the employees and hoard coins!!
It really is surprising; no wonder so many companies have started to imitate MicroStrategy in buying and hoarding coins. Currently, the following companies have started to hoard coins. Besides MicroStrategy, which is a giant, the others are smaller. However, as time accumulates, this data will only increase. This consensus is undeniable. Therefore, in the future, institutions will definitely hold a large portion of coins while retail investors will hold a smaller portion.
Why does SharpLink imitate MicroStrategy by buying Ethereum?
1. Seeing MicroStrategy's successful transformation, it must be learned from, especially since so many companies above have started to imitate it.
And if its main business is also losing money, it would be better to engage in crypto and earn passively!
So why not buy Bitcoin and buy Ethereum instead?
2. Currently, Bitcoin is at a high point, and even if Bitcoin rises to the market cap of the top gold, it only has 10 times the space (which is almost impossible in the short term), and the funds raised this time are only 400 million USD. At the current Bitcoin price, it can only buy 4,000 coins. If it drops later, it will negatively affect subsequent fundraising.
3. Currently, Ethereum is not at a new high, and it's only 2,500, which is still far from a new high. Currently, no company has started hoarding Ethereum, and it is the first mover. If they buy Bitcoin, they can only lift MicroStrategy's reputation; if they buy Ethereum, then if someone copies them later, they will be the number one institution hoarding Ethereum, and other institutions imitating them will just be lifting their reputation.
Do I think there are risks 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) mechanism, ETH's issuance has significantly decreased. However, with changes in network activity and an increase in 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, ETH's annual inflation rate has risen to about 0.805%, with an annual new issuance of about 3,477,831 ETH, which translates to 8.6 billion USD at the current coin price. The reason for the recent rise in inflation is that high gas fees have led many developers and projects to choose other high-speed public chains with lower gas fees, and during the bear market, on-chain activities are not active.
So is this 0.8% inflation issue a big deal? I don't think so, because you can calculate that Bitcoin's inflation is also about 0.8% (daily output of 450), but Bitcoin's output has costs, while Ethereum's output has no costs. And having no costs means miners are more likely to sell rather than hold.
2. Ethereum's leader Vitalik Buterin
After all, Ethereum is dictated by Vitalik. If you say it is strictly decentralized, it cannot really be counted as such, because Vitalik is capable of changing Ethereum's development path. He can switch Ethereum from POW to POS, and it could change to something else. If institutions hold more than a certain percentage of Ethereum, they can also influence Ethereum's decentralization. Therefore, it is possible for Vitalik to change the mechanism later. Bitcoin, however, is completely decentralized; currently, no one can change Bitcoin.
The first inflation risk is actually not bad, but the second point is more critical, because Ethereum is still dictated by Vitalik, meaning that there is a person who can directly press the button on this nuclear option.
Summary
SharpLink's actions reflect the growing interest of institutions in Ethereum. In 2024, the number of ETH 'accumulation wallets' increased by 65%, with total holdings exceeding 19 million coins, worth over 50 billion USD.
Moreover, in 2024, the only assets approved through ETF are Bitcoin and Ethereum. Although currently, the data for Ethereum ETF is vastly different from Bitcoin (Ethereum ETF total is 10 billion, Bitcoin ETF 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 also attract institutional interest? Please leave your comments.
