Consensys’ Ethereum treasury deal triggers 600% spike in gaming firm’s stock

Ethereum’s time has come. As a treasury asset, that is.

SharpLink Gaming, a listed sports and online casino marketing company, said Tuesday it was spending $425 million on Ether as a primary reserve asset in a deal with Ethereum powerhouse Consensys.

The move is an eyeopener given that SharpLink’s market capitalisation is just $4.7 million.

Yet the shift, which mirrors Michael Saylor’s longstanding acquisition of Bitcoin at Strategy, excited investors — SharpLink’s shares surged 600% on the news.

Ether, meanwhile, ticked up 3.8% on Tuesday.

Private sale

To finance the purchase of Ether, SharpLink executed a private sale of equity.

And Consensys, the Ethereum software company, led the deal, SharpLink, said in a statement. Consensys CEO Joe Lubin, who is also an Ethereum co-founder, will join the company as chairman.

Venture capital firms ParaFi Capital, Pantera Capital, and Arrington Capital also took part in the deal, which is expected to close on May 29.

“This is a significant milestone in SharpLink’s journey and marks an expansion beyond our core business,” said Rob Phythian, founder and CEO of SharpLink, in a statement.

Lubin said Consensys was looking forward to partnering with SharpLink to explore and develop an Ethereum treasury strategy.

While mostly known as a marketing firm for U.S. sports betting platforms, this is not the first time that SharpLink has expressed interest in the crypto space.

In February, SharpLink acquired a 10% stake in Armchair Enterprises, the owner of the crypto gaming/gambling website CryptoCasino.com.

“We identified several key factors that convinced us that expanding into crypto gaming was the right decision for us and our shareholders.” said Phythian.

Complete overhaul

Despite being a small acquisition of $500,000, February’s move signalled the company’s initial interest in crypto and paved the way for the Consensys deal.

This appears to be more than a hedging strategy.

The deal looks like a complete overhaul of SharpLink’s model.

Moreover, if successful, the approach could spur other companies to load Ethereum onto their balance sheets, much in the same way that Saylor’s Strategy did with Bitcoin.

Zachary Rampone is a DeFi correspondent at DL News. Have a tip? Contact him at zrampone@dlnews.com