SharpLink Gaming, once a sports betting marketing firm and now a major Ether treasury company, saw its share price dip on Monday after announcing a massive $400 million deal to buy more of the cryptocurrency. The agreement, with five global institutional investors, is expected to push SharpLink’s Ether holdings beyond $3 billion in value.

The deal involved selling shares at $21.76 each, generating total proceeds of $400 million. It was scheduled to close on Tuesday, pending final conditions. SharpLink already holds the second-largest Ethereum stash among public companies, trailing only Bitcoin mining service provider BitMine Immersion Technologies. The company’s chairman is Ethereum co-founder Joseph Lubin.

This move continues a growing trend of companies raising large sums to acquire cryptocurrencies, particularly Ethereum, as institutional confidence in digital assets rises.

Share Price Reaction: Drop, Then Recovery

Shares of SharpLink Gaming (NASDAQ: SBET) closed Monday down over 6.6% at $22.34. However, the stock gained nearly 3.5% in after-hours trading to $23.10. The decline reversed some of the gains the company had made over the past week, during which the share price surged to over $28 in early Monday trading.

Despite the day’s drop, SharpLink’s stock remains up 17.5% in the last five trading sessions and an impressive 189% since the company began buying Ether in May. Investors have reacted strongly to the firm’s cryptocurrency strategy, although volatility remains high.

This is not the first time SharpLink’s stock has seen sharp swings. In mid-June, the company’s shares plunged 73% in a single after-hours session after filing to potentially resell 58.7 million of its common shares. That move sparked confusion among investors, prompting Lubin to clarify on social media that it was a standard filing and not a sign of trouble.

Building One of the World’s Largest Ethereum Treasuries

SharpLink’s aggressive buying has rapidly built one of the largest Ethereum holdings in the world. As of Sunday, the company owned 598,800 ETH, worth about $2.57 billion at the time, based on Ethereum’s price of around $4,300.

Only BitMine Immersion Technologies holds more Ethereum, with over 1.15 million ETH valued at nearly $5 billion.

In the past week alone, SharpLink has raised nearly $900 million for its Ether purchases. On Thursday, the firm announced a $200 million share purchase agreement with four institutional investors. A few days earlier, on 5 August, it raised $264.5 million in net proceeds through an at-the-market offering. According to its latest announcement, SharpLink still has about $200 million in unused proceeds from such offerings.

Co-CEO Joseph Chalom said the rapid fundraising highlighted the market’s strong confidence in SharpLink’s Ether-focused strategy. He added that the “speed and scale” of investment reflected growing recognition of Ethereum’s “transformative potential”.

Ethereum’s Market Momentum Boosts Confidence

Ethereum’s price has rebounded strongly in recent weeks after underperforming Bitcoin for much of the year. Over the past month, ETH has surged 44.5%, climbing from below $3,000 to over $4,300.

As of Monday, Ether was trading at $4,278, just 12% below its all-time high of $4,878 set on 10 November 2021. This resurgence has been fuelled by optimism around Ethereum’s long-term role in decentralised finance, NFTs, and Web3 infrastructure.

For SharpLink, this price recovery strengthens the case for its aggressive acquisition strategy. With ETH prices close to record highs, the company’s growing holdings could see significant appreciation, though this also leaves it heavily exposed to crypto market volatility.

High Stakes, High Potential

SharpLink’s $400 million deal marks another major step in its transformation from a sports betting marketer to a crypto treasury giant. The company is betting heavily on Ethereum’s future value, using large equity raises to fund purchases at a rapid pace.

However, the strategy carries risks. Heavy concentration in a volatile asset like ETH could lead to sharp swings in the company’s valuation, as seen in past trading sessions. Market sentiment towards cryptocurrencies will likely remain the key driver of SharpLink’s stock performance in the months ahead.

With nearly $3 billion worth of Ether soon under its control, SharpLink’s fortunes are increasingly tied to Ethereum’s price trajectory. If ETH continues its upward momentum, the firm could see substantial gains. But any downturn in the crypto market would quickly test investor confidence.