TBW - Sharplink, Consensys and Linea's strategic arm
This is not an insignificant trajectory. In the space of a few weeks, Sharplink Gaming, until then an American company specialising in affiliation for the sports betting sector, has metamorphosed into a financial vehicle centred on Ethereum.
Under the leadership of Joseph Lubin, co-founder of Ethereum and boss of Consensys, the firm has adopted the ether (ETH) as its main reserve asset, to the point of becoming one of the largest listed companies to hold the token (ahead of the Ethereum Foundation but behind Bitmine).
A strategy reminiscent of that initiated by Michael Saylor with bitcoin in 2020, but transposed here to the world of Ethereum.
The turning point came at the end of May, when Sharplink announced its intention to convert its cash into ETH, while launching a vast share issue programme to finance these acquisitions. Since then, the company has raised more than $1 billion on the markets, including a $425 million private placement led by Consensys.
On 28 July, it held 438,000 ETHs, with an estimated value of $1.7 billion. In parallel, the company operates validators and has already generated more than 567 ETH in staking (more than $2 million).
His "ETH Concentration", an internal indicator that measures the number of ETH per batch of 1,000 shares, has risen from 2.3 to more than 3.06 in a month and a half, an increase of 53%.
Ethereum's "Strategy"?
Joseph Lubin has taken over as chairman of the board and publicly assumes the desire to make Sharplink a catalyst for the institutional adoption of Ethereum. Inspired by Strategy (formerly MicroStrategy), the co-founder of Ethereum is already considering long-term debt instruments to accompany equity fundraising: low-rate bonds, equity convertibles, but without excessive risk-taking, he says.
Strategy shares have appreciated by 38% since the start of the year (and by more than 3,000% since the start of its bitcoin purchase programme in 2020).
But the strategy goes well beyond accumulation. Sharplink is also positioning itself as a relay in a context favourable to Ethereum, which was suffering from a lack of influence in institutional spheres.
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On Friday, the company announced the recruitment of Joseph Chalom as co-CEO, until then head of crypto for global asset management leader BlackRock. Joseph Lubin welcomed the recent adoption of the GENIUS Act, a law passed under the Trump administration that establishes a federal regulatory framework for digital assets in the United States. He sees it as the end of an era of regulatory uncertainty and an opportunity to accelerate the adoption of Ethereum as the technological foundation for digital finance.
As a listed and compliant company, Sharplink thus serves as a showcase for an institutionalised version of the Ethereum ecosystem, likely to appeal to mainstream investors.
Background, a new form of "Ethereum proxy" is taking shape. Where spot ETFs still struggle to channel investor demand, and derivatives introduce a level of abstraction that is often misunderstood, Sharplink offers direct, readable and auditable exposure to Ethereum's native asset.
For some investors, this could represent a credible alternative to buying tokens directly, provided they accept the dilution induced by share issues (read our report devoted to Bitcoin Treasury Companies for a full understanding of the business model and risks of these companies).
It remains to be seen whether this strategy will find its footing in a volatile market saturated with narratives. The rapid rise in SBET's share price (up sixfold since the end of May) was sharply reversed in mid-July, with a 69% fall following the registration of shares held by the initial investors.
Joseph Lubin sought to be reassuring, explaining that this was a standard procedure, necessary to welcome new entrants. He says that many investors are still on the sidelines and that significant ETH flows are still expected to join the company's treasury.
Sharplink remains a singular bet in the Crypto Treasury Companies landscape because of its proximity to Linea, an Ethereum second layer (layer 2) blockchain that allows it to multiply its scalability while benefiting from the high security of the Ethereum blockchain (layer 1).
Consensys is the company that designed Linea and provides most of its governance. According to our information, many ETHs held by Sharplink are expected to be deposited into Linea in order to earn returns on them and bring high liquidity into Linea.
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