In July 2025, the crypto market seemed to suddenly wake up from its unconsciousness and turned its attention to a company - Sharplink Gaming.
The wind suddenly rises, rippling the spring water.
This data company, headquartered in the Eastern United States, whose main business was originally sports betting marketing, has, in just over a month, used a nearly script-killing approach to shape itself into a test subject for a new narrative:
Companies can build a digital treasury driven by ETH like a country, replicate the model of financial leverage driving asset flywheels like MSTR, and even use the staking mechanism to make all of this not only feasible but also "self-reproducing."
From 0 to 358,000 ETH, with a holding size of over $1 billion, Sharplink's big turnaround was clean and radical, and the community was jubilant: ETH finally had its own MicroStrategy.
But last night, the market gave a less gentle answer.
SBET's share price suddenly plummeted from $49 to below $40, a drop of nearly 18%. $279 million in market value evaporated. Not only did Sharplink itself fall, but it also brought down the "ETH MicroStrategy Brotherhood" that tried to copy its model.
This reversal is not just a roller coaster ride for one company, but more like a structural test of some new treasury fantasy.
In the river of Web3, which is destined to not be explained by the old framework, the answer given by Sharplink is full of temptations and uneasiness.
The story of Sharplink officially became known to the Web3 community on June 2, 2025.
That day, the company issued a notice that sounded a bit like an encrypted version of the central bank’s digital currency declaration: it stated that it would establish an ETH treasury through stock financing and become a reserve-type enterprise with Ethereum as its underlying asset.
This is not a game that was played out on a whim, but more like a strategic launch that had been planned in advance.
The company's chairman, Joseph Lubin, is also the co-founder of Ethereum and the CEO of Consensys. His triple identity ensures that this transformation is blessed with the halo of the ETH ecosystem from the very beginning.
In the following month, Sharplink fully demonstrated what it meant to say "The only way to defeat all martial arts in the world is to be faster."
First, on June 2, it raised $425 million through its first round of financing, bought 176,271 ETH in one go, staked all of them, and became one of the network’s validators;
Then came a dizzyingly rapid series of buys:
June 8: Holdings increased to 205,634 ETH, staking rewards 322 ETH (worth $960,000):
July 10: Received 10,000 ETH from Ethereum Foundation in OTC form (valued at $25.7 million, average price of $2,572.37), holdings reached 198,167 ETH, staking rewards 222 ETH. ;
July 12: Purchased 21,487 ETH (US$64.26 million), holding 253,000 ETH, with a floating profit of US$79 million.
July 15: Purchased 74,656 ETH ($213 million), holding 280,706 ETH;
Another 32,892 coins were added before the closing on July 18.
In the end, Sharplink's holdings were fixed at 358,000 ETH, with a floating profit of US$260 million and staking income of 415 ETH.
What is the concept?
This almost exceeds the holdings of the Ethereum Foundation, making it the world's largest corporate ETH account.
The whole process took place without any hesitation or resistance, like a charge with a strong sense of faith.
Of course, the market saw the strength of this bet and quickly responded with a fierce reaction. Retail investors who were waving flags and cheering also followed suit, and E guards suddenly appeared all over the mountains and valleys.
SBET's stock price has taken off since its June low, with a maximum increase of more than 650%, and its market value once reached US$1.55 billion.
The company also took the initiative to invent a new indicator - ETH concentration, which is the amount of ETH corresponding to every 1,000 shares of SBET (currently 2.46 ETH), trying to establish a psychological anchor point for investors for ETH Proxy shares.
On the X platform, CryptoRover continuously tracked Sharplink’s buying path, and MrAPE directly called it “MicroStrategy of Ethereum”.
The passion for narrative was ignited and funds poured in, as if everyone had determined overnight that this was a new path that could be replicated.
But the higher the heat, the easier it is to overload.
On July 17, Sharplink Gaming disclosed a key piece of information in the S-3 supplemental prospectus it submitted: they increased the original $1 billion ATM equity issuance quota to $6 billion in one go.
The additional $5 billion will be used to continue purchasing ETH and expand the so-called "ETH treasury."
Rather than exciting the market, this decision acted like a lit fuse, triggering a panic in just 24 hours.
On the evening of July 18, SBET's stock price suddenly plummeted by nearly 18%, from $49 to below $40, and its market value evaporated by $279 million in an instant.
As the storm began to pass, other targets that followed the "ETH micro-strategy" route also fell, with declines ranging from 5% to 10%.
The market sentiment is not because something is wrong with ETH, but because everyone sees a familiar script repeating itself:
Large-scale additional issuance dilutes shareholders, institutions arbitrage, and retail investors take over.
The $5 billion issuance quota was undoubtedly too large compared to the company's total market value of only $1.55 billion at the time. Investors began to worry whether this was another case of prepaying future confidence to institutions that subscribed at a low price.
What’s more, this kind of gameplay also makes people begin to question whether the company is betting on the long-term value of ETH or turning ETH into a set of reusable narrative levers.
When the financing structure looks more like an arbitrage machine rather than value investment, naturally no one is willing to pay for the next round.
The sudden change in the story made everyone realize that this was not a perpetual motion machine, but a structural bet that relied on market narratives.
The flywheel still stumbled.
But why did many people say it was like MSTR in the beginning.
Is it like? Or is it exactly?
We have to go back to that 2020 summer.
MicroStrategy uses a sophisticated financial engineering model to turn BTC into the engine of the company's market value.
It first raised funds through low-interest convertible bonds to acquire BTC, and then relied on the rise in BTC to drive up the company's stock price. It then raised funds for the second time at a higher valuation and continued to increase its BTC holdings. Once the flywheel is started, it forms a virtuous closed loop of financing - increasing holdings - market value growth - refinancing.
MSTR's operation took four years and eventually bought more than 580,000 BTC. With low costs, stable structure, and deep belief, it created a more solid corporate narrative than gold on BTC, a non-productive asset.
Sharplink's style looks similar, but the details reveal many differences:
First, it uses equity financing rather than convertible bonds, which means the risk of dilution is more direct;
Secondly, ETH itself is a stakeable and generative asset. In addition to the rising returns, it also comes with staking rewards, which is both an advantage and a complexity.
Furthermore, Lubin is the co-founder of ETH. His belief is not BTC-style minimalism, but an ecologically collaborative value structure. Sharplink's path is more inclined to ecological binding and strategic collaboration rather than single-point gambles.
Finally, the time dimension is different. MSTR took four years to build the flywheel, while Sharplink only took six weeks. Everything was too fast and too light.
This is why it flies fast, but also falls hard.
Sharplink's flywheel is actually more like a "money printing machine-like" structure: issuing additional shares to raise funds to buy ETH. The rise in ETH drives the stock price to soar, forming expectations of price increases, and then issuing more shares and continuing to buy.
This closed loop can indeed snowball with the cooperation of the market, but it also requires all participants to believe that someone will pay in the next round. Once marginal doubts arise, the entire structure will collapse quickly like a bubble.
The announcement of a $6 billion share issuance on July 17 was a signal that the bubble was beginning to tremble.
In the previous 425 million financing, although the subscription cost was only 6.15 US dollars, the stock price rose to a maximum of 60 US dollars, creating a huge arbitrage space and also sowing doubts about the intentions of institutions: Are these subscribers really optimistic about ETH, or are they just arbitrage machines?
This time, the $6 billion limit almost caused the entire flywheel to accelerate out of control.
The market was speechless for a moment, retail investors fled in all directions, SBET stock price plummeted, and institutions completed arbitrage and left.
Moreover, Sharplink’s approach is not just about the national treasury, it also has a clear tendency to be bound to the ecosystem.
Let's take a side trip and bring Linea, which is increasingly being condemned, into the picture:
Lubin's dual identity enables it to have a deeper collaborative path with ecological entities such as Ethereum Foundation and Linea than MSTR.
On July 10, Sharplink purchased 10,000 ETH from the Foundation through OTC, which was regarded as the Foundation's recognition of its long-term holder;
Linea publicly supported the SBET Treasury plan on June 2, the day of the strategic release, and stated that its staking actions would help improve the liquidity and security of the L2 network;
On July 5, Linea’s official blog posted that SBET’s holdings are providing ecological support for Linea. Lubin himself also reposted and commented "SBET, ETH, LINEA", saying, "Brother, I support you."
This is not just a simple business cooperation, but an expansion of the internal cycle of the Web3 structure:
The Foundation receives R&D funding, Linea receives on-chain activity, and Sharplink receives favorable ETH prices and staking convenience.
Everything seems seamless, but it relies too much on collaborative trust. Once there is a variable in one of the links, the structure will be more fragile than MSTR.
The core of the problem is not whether ETH is worth allocating, but whether the structure is overly dependent on market narratives.
This is the essence of last night’s crash: it wasn’t ETH that fell, it was the narrative that got out of control.
ETH also only slightly pulled back 2% that day, but the agency effect of SBET was multiplied.
CryptoRover called it “dilution hell” on X, with all-day trading volumes hitting new highs and retail and institutions becoming extremely real at the same moment.
We always tend to believe that the flywheel can run forever, but in fact, every acceleration is overdrawing confidence in the next round.
This structure of Sharplink looks like a miracle when it is rising, but looks more like a trap when it is falling.
If you ask what will happen in the future, Sharplink will most likely continue to expand its holdings and continue to raise funds, but the pace may slow down.
In the short term, if the new issuance can be completed smoothly, ETH holdings may exceed 400,000, and the stock price will have some room for rebound, but the market's concerns about dilution cannot be ignored;
In the medium term, if the ETH ETF can continue to bring inflows, Sharplink's flywheel may still have a chance to survive, and the floating profit may double. However, if the SEC tightens supervision on this "junk bond-like" financing method, it may usher in a second drop.
In the longer term, if this model can be recognized by the market, corporate treasuries will no longer be the exclusive narrative of BTC, and the institutionalization of ETH will enter an accelerated stage.
But we must also admit that compared with the value storage logic of BTC, the generative and ecological characteristics of ETH make its "treasury model" naturally complex and fragile.
Sharplink's experiment is undoubtedly radical and highly valuable for reference.
It shows us that in a Web3 market that operates on structure, financing is no longer just a tool, but can also be part of the narrative;
ETH is no longer just an ecological asset, it can also become an active variable on a company’s balance sheet, so in the final analysis, this is still a positive.
But at the same time, it also reminds us that behind every seemingly smooth flywheel is a precise balance system that is extremely dependent on emotions and confidence. Once this balance is broken, the fall may be faster and heavier than the traditional market.
You may think they are crazy, or you may think they are smart.
But in any case, this is no longer an isolated incident, but a new path that is being noticed by more companies.
Sharplink has torn open a gap, and more adventurers will surely follow.