SharpLink suffers $394M in losses on the write down of its ETH during Q2

SharpLink reported a loss of $394.30 million for the second quarter after the falling ETH price resulted in $397.1 Million unrealized and written-off losses.

ETH writing-downs are greater than revenue growth

SharpLink’s second-quarter results Revenue for the three-month period ending June 30 was up to $11.5 million, compared with $697,000 just a year before.

SharpLink’s holdings of cryptocurrency accounted for most of the loss, rather than operating expenses. As ETH’s value dropped during the quarter, SharpLink reported a $321m unrealized loss.

A further $76.1 million was deducted from its LsETH or weETH holdings. SharpLink claimed that the charges were not cash items, and they did not impact its ETH holdings.

According to U.S. generally recognized accounting principles, the impairment reduced the carrying value of the liquid stake tokens. This reduction, according to the company cannot be reversed in the event that LsETH/weETH’s market value recovers.

SharpLink posted a loss per share of 1,88 cents, as opposed to $4.27 in 2025. In the year prior, its overall net loss was $103.4 millions. Unrealized crypto losses were only $2.4million.

It follows on from a loss that was even greater in the opening quarter. Crypto.news reported previously that SharpLink posted a $685.6 million Q1 loss, which includes $506.7 millions in unrealized ETH and a $91.7 million impairment to LsETH.

SharpLink reported a net loss of $1.08billion for the first half year 2026. In its half-year account, SharpLink included unrealized crypto losses of $827.7 millions and impairment charges of $267.8million.

SharpLink generates most of its revenue through stakes

SharpLink’s ETH treasury strategies were implemented for the entire quarter, resulting in a revenue increase of more than 15-fold compared to the previous year. The strategy was launched on 2 June 2025. This leaves less than a month in comparable activity.

SharpLink reported $11.5 millions in revenue during the second quarter. Staking contributed $11.2 Million of that. In the first half 2026, ETH revenue reached $22.7 millions.

As the treasury expanded, costs increased. The selling, general, and administrative costs increased from $2.4 to $9.1 due to higher expenses for personnel, custody and insurance as well as legal and accounting services.

SharpLink, which is heavily reliant on staked revenue to generate its revenues, has been included in the Ethereum issuance discussion. CEO Joseph Chalom spoke recently opposed a proposal This could eliminate issuance-based staking incentives, arguing native yield is what helps differentiate ETH from other non-yielding asset types such as Bitcoin.

Chalom brought up the fact that Chalom’s company earned 18,000 ETH from staking. SharpLink’s Treasury income could be affected by a reduction in validator issue, even if its token balance remains the same.

SharpLink owns $1.4 billion in crypto assets

SharpLink held approximately 886.881 ETH or ETH equivalents at the end of June. As of June 30, the total included 632,784 native Ethereum, 181,321 LsETH ETH (as if redeemable) and 72,776 weETH ETH.

According to U.S. GAAP, the portfolio’s combined value was approximately $1.4 billion. The assets measured at fair values accounted $988.8 millions, and crypto assets at cost were another $369.1million.

The decline in total assets to $1.42bn from $2.43bn at the end 2025 is primarily due to the reduced value of its crypto holdings. Over the same time period, the stockholders’ equity dropped from $2.42 to $1.41 while the deficit accumulated increased to 1.89 billion dollars.

SharpLink’s data shows how cryptocurrency fluctuations can lead to large fluctuations in earnings reported without any cash losses or token sales. SharpLink’s $321m unrealized loss was reflected on the income statements even though they retained the ETH.

Cash and equivalents of $56.2m reached the end June up from 28.5m on December 31. SharpLink’s cash usage for the third quarter was about $7.2 million, which is the difference between the actual cash used to run the business and the accounting loss associated with its crypto assets.

Purchase 10,000 more ETH with the Share Offering Fund

SharpLink closed a $75 Million Registered Direct Offering on June 23. The company sold 10,013,351 Common Shares and accompanying Warrants for a total price of $7.49. The offering, according to the company was overpriced.

A portion of the proceeds was used to buy approximately 10,000 ETH, at a price of around $1.611. The company extended its return to accumulation by extending the transaction. crypto.news reported SharpLink is now buying ETH again after an eight-month pause.

The company repurchased 2.1 million shares of common stock during the first quarter for an average cost per share of $4.70. This would have been a $10 million expenditure. SharpLink began its program in August of 2025 and has since purchased 4,071,223 common shares at a total cost of $41.7 million.

The repurchase of shares removed the smaller portion from the public’s ownership, even though the offer increased the total number. SharpLink describes both transactions in its efforts to maintain the amount of Ethereum attributable per share.

SBET, a Nasdaq listed company, joined the Russell 2000 index and Russell 3000 during June’s reconstitution. This makes SBET eligible to be owned by U.S. fund managers that track these benchmarks. On August 7, its shares were valued at $6.43, a gain of 2.23% in the trading session prior to the release of the results.

SharpLink’s Treasury had increased by approximately 888 938 ETH and equivalents to ETH as of Aug. 3rd. The Galaxy SharpLink Onchain Yield Fund was established after the end of the third quarter. Galaxy contributed the other $25 million, and served as the investment manager.