This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.
As corporate bitcoin treasury strategies proliferate, one firm is set to focus on buying ether at scale.
We all know about Strategy’s relentless bitcoin purchases (it bought another 4,020 BTC last week) and how more companies are following its lead.
Well, SharpLink Gaming revealed Tuesday that it intends to use the proceeds of a $425 million private placement to buy ETH. Ethereum co-founder Joseph Lubin is set to become SharpLink’s board chair.
Shares of the Nasdaq-listed company were up roughly 400% on the day at 2 p.m. ET.
“ETH is a scarce asset that has bouts of deflation when chain activity is high, while simultaneously providing a nice yield through staking,” said Matt Lason, CIO at crypto hedge fund Globe 3 Capital. “This combination of scarcity, deflation and yield is an ideal scenario for a treasury strategy.”
While others have recently bought ETH on a smaller scale (Beyond Medical, SRx Health Solutions), Lason told me SharpLink is set to have a first-mover advantage similar to Michael Saylor-led Strategy. Having Lubin and a “AAA-list” of Web3 investments companies (Consensys, Pantera, GSR, Galaxy Digital, etc.) certainly helps, he noted.
LMAX Group crypto strategist Joel Kruger said capital is expected to flow beyond bitcoin as crypto matures, pointing out the falling BTC dominance and growing adoption of ether ETFs.
“While Ethereum carries more risk given its evolving technology and broader use case, its role as the backbone of internet capital markets makes ETH exposure a logical, if bolder, move for companies looking to diversify their crypto treasury strategy,” he told me.
Kruger said ETH appears to have formed a solid bottom and could retest its 2021 high (~$4,880) in the coming months. ETH was trading around $2,700 at 2 p.m. ET — up 48% over the past month.
“While Solana has captured some short-term liquidity, Ethereum remains the more battle-tested, decentralized and developer-diverse ecosystem,” he added.
Some will continue to prefer Ethereum’s rival layer-1 blockchain. Sol Strategies in April announced a convertible note facility of up to $500 million dedicated to acquiring and staking solana tokens.
As for Lason’s outlook for ETH, he expects a new all-time high by the year’s end and a possible push to $8,000 by the end of 2026.
Price predictions are, well, just predictions. But it’s good to have them on the record.
Get the news in your inbox. Explore Blockworks newsletters:
