SharpLink's Bet on Ethereum Puts Its Results Under Pressure

The second quarter of 2026 reveals the accounting cost of SharpLink’s bet on Ethereum. Despite strong revenue growth, the company reported a net loss of $394.3 million. This underperformance mainly stems from the decline in the ETH price and its impact on the book value of held assets. However, revenues are increasing thanks to staking, despite this exposure to digital assets. The company also continues its Ether purchases and share buybacks.

SharpLink Takes a Heavy Loss Related to Ethereum

SharpLink recorded a net loss of $394.3 million in the second quarter. The main factor is a latent loss of $321 million on its Ether holdings. The decline of the ETH price during the quarter reduced the book value of these assets under US GAAP rules. Additionally, there is a depreciation of $76.1 million on two liquid staking tokens, LsETH and weETH.

These accounting adjustments do not correspond to a direct cash outflow. The company also states in its press release that a later market recovery does not offset these depreciations in its accounts. However, they do not reduce the number of tokens held by SharpLink. Gains made therefore helped mitigate part of the negative impact recorded in the quarter.

The loss remains higher than the $103.4 million recorded a year earlier. However, it marks an improvement compared to the first quarter of 2026. The company then posted a loss of $685.6 million, following a stronger drop in the ETH price. The second quarter thus shows strong accounting pressure, but less severe than the previous quarter.

Revenues Strongly Increase Despite Losses

Despite this loss, SharpLink generated $11.5 million in revenue between April and June. A year earlier, the figure was only $0.7 million. Rewards from ETH staking represent $11.2 million of this revenue. This growth reflects the active treasury management strategy launched on June 2, 2025.

This strategy mainly had its effect over a full quarter, compared to a few weeks earlier. Meanwhile, expenses have risen sharply. Selling, general and administrative expenses reached $9.1 million, compared to $2.4 million a year earlier. The company bears notably higher costs related to personnel, custody, insurance, legal, and accounting.

The gap between revenues and costs remains a central element of the published results. The revenue increase is not enough to absorb the additional charges. However, revenues from staking now contribute much more substantially. This development directly supports the increase in Ethereum assets held by the company.

SharpLink Continues its ETH Accumulation

Latent losses have not interrupted Ether purchases. SharpLink held about 886,881 ETH at the end of June, then about 888,938 ETH on August 3. At the end of the quarter, this reserve represented about $1.4 billion according to GAAP standards. The company thus continues to strengthen its Ethereum exposure despite the pressure on its accounts.

On June 23, the company finalized a direct offering of $75 million. It sold just over 10 million shares with subscription warrants at $7.49 per unit. Part of the funds was used to buy about 10,000 ETH at an average price of $1,611. In addition, share buybacks continue with about 2.1 million shares during the quarter.

Since the buybacks started in August 2025, the company has canceled 4,071,223 shares for about $41.7 million. In June, Russell also included the stock in its 2000 and 3000 indices. Following the results, the SBET share price dropped 6% to $6.05. Finally, SharpLink and Galaxy Digital launched an on-chain yield fund with $125 million.

This development extends the strategy around Ethereum assets. The company contributes $100 million from its treasury in staking, while Galaxy Digital provides $25 million and manages the fund. In the short term, upcoming quarterly financial results will measure the effect of ETH price changes on the accounts and staking’s ability to support revenues.