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For two years, bitcoin has become an essential reserve asset. Strategy’s regular purchases prove it month after month. But the company SharpLink innovates by choosing ethereum as a reserve asset with a purchase of 463 million. Is this the beginning of a large-scale movement in favor of ETH?
In Brief
SharpLink is building up a treasury in ethereum.
Who are the biggest holders of ethereum?
Can ETH be considered a reserve asset?
SharpLink is building a treasury in ethereum
The sports betting company SharpLink adopts a counter-current strategy by building a reserve in ethereum. Indeed, for now it is mainly bitcoin that is used as a reserve in corporate treasuries. Strategy by Michael Saylor is undoubtedly the most well-known example of this trend. Contrary to these companies and thanks to a fundraising through stock sales carried out in May, SharpLink bought 176,271 ETH, equivalent to 463 million dollars, for its treasury.
This is a turning point for SharpLink and for the adoption of digital assets by publicly traded companies
Rob Phythian, CEO of SharpLink Gaming
SharpLink has placed 95% of the ETH in staking and liquid staking. The company will thus be able to obtain a regular return on its investment. This choice is also a symbol of a long-term commitment to ethereum. SharpLink is the first company listed on Nasdaq to use ethereum as a reserve asset.
Who are the biggest holders of ethereum?
Although its purchase makes SharpLink one of the largest holders of ethereum, the company is not the biggest holder. The top spot is held by the Ethereum Foundation, which owns 214,129 ETH. Of course, next are asset management funds who hold the ETH of clients who have invested in ethereum ETFs. BlackRock thus keeps 1.7 million ETH in reserve with a value of 4.5 billion dollars.
We must also not forget cryptocurrency exchanges such as Binance and Kraken, with respectively 4.4 million and 1.7 million ETH. These exchanges also hold their clients’ ethereum. So we see that aside from the Ethereum Foundation (and Vitalik Buterin himself), SharpLink is the largest holder of ETH for its own account.
Can ETH be considered a reserve asset?
SharpLink’s decision to make ethereum a reserve asset is surprising. However, the stock market has welcomed this decision positively. SharpLink’s share price rose 400% after the announcement on May 27. Since then, a misunderstanding about movements between the company’s wallets, raising fears of a quick sale of ethereum, led to a 73% drop in the stock.
Despite the market enthusiasm regarding this decision, we must remember that SharpLink’s chairman is none other than Joseph Lubin, one of Ethereum’s co-founders. So it is not surprising that his company chose ethereum as a reserve asset.
Since the creation of spot ETH ETFs, ethereum has not experienced a bullish rally like bitcoin has. It has even underperformed some altcoins such as XRP or SOL. So it is possible that SharpLink’s choice remains a relatively isolated strategy. For its choice to be followed, ethereum would need to solve the difficulties related to its economic model. These changes would likely allow it to return to an upward trend.
With its purchase of 176,271 ETH, SharpLink is the first Nasdaq-listed company to build a treasury in ethereum. This surprising decision sets it apart from all companies buying bitcoin but should not change their strategies in the short term.
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Passionné par l’histoire du Web3, je m’efforce de rendre cette nouvelle ère numérique plus compréhensible grâce à mes articles et à ma thèse de doctorat en cours sur le sujet.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
