Coin WorldFriday, Jul 18, 2025 8:58 am ET
1min read
SharpLink Gaming, a prominent player in the cryptocurrency market, has recently faced scrutiny over its valuation and business practices. The company’s stock surge has been largely attributed to its substantial holdings in Ethereum (ETH), rather than any notable growth in its core business operations. This has resulted in shares trading at a price significantly higher than their net asset value (NAV) and fundamental valuation, sparking concerns among investors about the sustainability of its current market position.
SharpLink Gaming has been aggressively expanding its Ethereum holdings, recently increasing its share offering from $1 billion to $6 billion to facilitate further Ethereum purchases. This move follows the company’s amendment to its sales agreement, which raised $5 billion specifically for Ethereum investments. The company’s strategy of holding large amounts of Ethereum has been compared to that of Bit Digital, another firm that has been expanding its Ethereum holdings. Bit Digital recently acquired approximately 19,683 Ethereum using the net proceeds from its $67.3 million registered direct offering to institutional investors. Following this transaction, Bit Digital holds approximately 120,306 ETH. The company’s investment strategy is driven by its belief in Ethereum’s programmable nature, growing adoption, and staking potential.
However, the focus on Ethereum holdings has led to concerns that SharpLink Gaming may be an overpriced Ethereum wrapper, rather than a company with a strong business model. The company’s shares are trading at a significant premium to their NAV, indicating that investors are valuing the company based on its Ethereum holdings rather than its underlying business fundamentals. This has led some analysts to recommend selling SBET stock, as the current valuation may not be sustainable in the long term.
The situation has been further complicated by the entry of other players into the Ethereum market. For example, Peter Thiel-backed Bitmine has overtaken SharpLink Gaming as the largest ETH holder, escalating the FOMO (fear of missing out) around Ethereum treasuries. This has put additional pressure on SharpLink Gaming to justify its valuation and investment strategy.
In conclusion, while SharpLink Gaming’s aggressive acquisition of Ethereum has driven its stock rally, it has also raised concerns about the company’s valuation and business model. Investors should carefully consider the risks and potential rewards of investing in a company that is primarily valued based on its cryptocurrency holdings, rather than its underlying business fundamentals. 
