Possible Ethereum sale: SharpLink announcement causes uproar
- SharpLing Gaming, one of the largest ETH treasury firms, has approved a $1.5 billion share buyback program.
- In an announcement Friday, the company said it has authorized share repurchases as part of its “disciplined capital markets strategy.” No repurchases have been made to date.
- The company's co-CEO, Joseph Chalom, stated that the company will consider buybacks if the shares trade at or below the net asset value of its ETH holdings. “This program provides us with the flexibility to act quickly and decisively if these conditions arise,” he added.
- SharpLink's strategy focuses on accumulating and staking Ethereum to increase the coin-per-share KPI—in this case, ETH—commonly known among crypto treasury firms. Buying back shares below net asset value would increase this ratio.
- However, the announcement prompted questions in the crypto community about how the potential share buybacks would be financed. Some speculate that the company would sell ETH for this purpose.
- However, a buyback is unlikely to occur in the near future, and ideally never. Therefore, panic among ETH investors is misplaced, especially after the recent price explosion in the crypto market. This was prompted by Fed Chairman Powell's speech.
- At the end of May, SharpLink appointed Ethereum co-founder Joseph Lubin as chairman. At the time, the company stated, “ETH will serve as the company's primary treasury reserve asset.”
- In early July, Lubin stated that ETH treasuries are crucial to the development of the Ethereum ecosystem. He said such ventures are “great business,” but also explained that “it will be critical to enable the supply-demand dynamics of Ether as we build more and more applications.”
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source
- Press release | SharpLink
