Despite its treasury growth, the company reported net losses between April and June worth $103 million.
Ethereum (ETH) fell 2% on Friday following SharpLink Gaming’s (SBET) reported quarterly losses of $103 million despite growing its treasury holdings to 728,000 ETH.
In its first quarterly report since pivoting toward an Ethereum treasury in May, esports marketing company SharpLink Gaming revealed its stash has exceeded 728,000 ETH worth over $3.2 billion, at the time of writing. The company stated “nearly all” its holdings is deployed into securing the Ethereum network via staking, earning a yield of 1,326 ETH so far.
“In the short period since launching our strategy, we’ve raised significant capital and scaled our ETH holdings in a highly accretive manner,” said SharpLink’s co-CEO Joseph Chalom.
Despite the growth in its treasury, SharpLink reported net losses of $103 million between April and June, a huge yearly decline from its net income during a similar period last year. It also saw a 30% YoY decline in revenue, which came in at just $0.7 million in Q2.
The company noted that the net losses stem from a $87.8 million non-cash impairment of its liquid staked ETH, as it had to recognize the lowest price the tokens traded at in Q2 — which was $2,300 — based on US Generally Accepted Accounting Principles (GAAP) rules.
“To reiterate, this is a non-cash loss resulting from current US accounting rules. The company has not sold or redeemed any of its LsETH assets,” SharpLink noted in the report.
Following the report, SharpLink’s shares plunged by 15%, closing the day at $19.85 on Friday.
Since gaining mainstream attention in June, Ethereum treasury companies have accumulated over 2.7 million ETH, with BitMine Immersion (BMNR) leading the way with holdings of 1.2 million ETH.
Ethereum fell below the $4,500 support after a failed attempt to return toward the $4,700 level. The decline sparked $169 million in futures liquidations over the past 24 hours, with liquidated long positions rising to $130 million and short liquidations accounting for the remainder, according to Coinglass data.
The top altcoin could find support at $4,100, a level that previously served as a key resistance over the past year. A further decline below $4,100 could send ETH to $3,500 — a level strengthened by the 50-day Exponential Moving Average (EMA) and Simple Moving Average (SMA).
The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) have retreated from their overbought regions, with the former testing its moving average line. The decline aligns with price corrections that occasionally follow overheated conditions in both indicators.
A reclaim of its all-time high above $4,868 will invalidate the thesis and potentially send ETH to $5,000.
