SharpLink posts $394M Q2 loss on ETH write-downs

SharpLink has posted a $394.3 million second-quarter loss after falling ETH prices produced $397.1 million in unrealized losses and write-downs.

ETH write-downs outweigh revenue growth

SharpLink’s second-quarter results showed that revenue reached $11.5 million during the three months ended June 30, up from about $697,000 one year earlier.

Most of the quarterly loss came from SharpLink’s cryptocurrency holdings rather than its operating expenses. The company recorded a $321 million unrealized loss on assets measured at fair value as ETH traded lower during the quarter.

Another $76.1 million impairment applied to its LsETH and weETH positions. SharpLink said both charges were non-cash items and did not reduce the number of ETH or ETH-equivalent tokens it controlled.

The impairment still lowered the carrying value assigned to the two liquid staking tokens under U.S. generally accepted accounting principles. According to the company, that reduction cannot be reversed if the market value of LsETH or weETH later recovers.

SharpLink reported a diluted loss of $1.88 per share, compared with $4.27 per share in the same period of 2025. Its overall net loss increased from $103.4 million a year earlier, when unrealized crypto losses totaled only $2.4 million.

The latest result follows an even larger loss during the opening quarter. Crypto.news previously reported that SharpLink posted a $685.6 million Q1 loss, including $506.7 million in unrealized ETH losses and a $191.7 million impairment on LsETH.

For the first six months of 2026, SharpLink’s net loss reached $1.08 billion. Its half-year accounts included $827.7 million in unrealized crypto losses and $267.8 million in impairment charges.

Staking produces most of SharpLink’s revenue

Revenue increased by more than 15 times from the year-earlier period after SharpLink operated its ETH treasury strategy for the full quarter. The company launched the strategy on June 2, 2025, leaving less than one month of related activity in the comparable period.

Staking supplied $11.2 million of SharpLink’s $11.5 million in second-quarter revenue. Staking revenue for the first half of 2026 reached $22.7 million, making ETH yield the company’s main source of reported income.

Costs rose alongside the expanded treasury operation. Selling, general and administrative expenses increased to $9.1 million from $2.4 million a year earlier because of higher personnel, custody, insurance, legal and accounting expenses.

SharpLink’s reliance on staking revenue has also placed the company inside Ethereum’s issuance debate. CEO Joseph Chalom recently opposed a proposal that could eventually eliminate issuance-based staking rewards, arguing that native yield helps distinguish ETH from non-yielding assets such as Bitcoin.

The company had earned more than 18,000 ETH in staking rewards when Chalom discussed the proposal. A reduction in validator issuance could therefore affect SharpLink’s treasury income even if the number of tokens on its balance sheet remains unchanged.

SharpLink holds $1.4B in crypto assets

SharpLink controlled approximately 886,881 ETH and ETH equivalents as of June 30. The total consisted of 632,784 native ETH, 181,321 ETH represented by LsETH on an as-if-redeemed basis and 72,776 ETH represented by weETH.

Its crypto portfolio carried a combined value of about $1.4 billion under U.S. GAAP. Assets measured at fair value accounted for $988.8 million, while crypto assets held at cost accounted for another $369.1 million.

Total assets declined to $1.42 billion from $2.43 billion at the end of 2025, primarily because of the lower value assigned to its crypto holdings. Stockholders’ equity fell from $2.42 billion to $1.41 billion over the same period, while the accumulated deficit increased to $1.89 billion.

For U.S. investors, SharpLink’s figures show how cryptocurrency price changes can cause large swings in reported earnings without an equivalent cash loss or token sale. Its $321 million unrealized loss moved through the income statement even though the company retained the affected ETH.

Cash and cash equivalents reached $56.2 million at the end of June, up from $28.5 million on Dec. 31. SharpLink used about $7.2 million in cash for operations during the quarter, separating its actual operating cash use from the larger accounting loss attached to its crypto assets.

Share offering funds another 10,000 ETH purchase

SharpLink completed a $75 million registered direct offering on June 23, issuing 10,013,351 common shares and accompanying warrants at a combined price of $7.49. The company said the offering was priced above its net asset value.

Part of the proceeds funded the purchase of approximately 10,000 ETH at an average price of $1,611. The transaction extended the company’s return to accumulation after crypto.news reported that SharpLink resumed buying ETH following an eight-month pause.

The company also repurchased about 2.1 million common shares during the quarter at an average price of $4.70, spending roughly $10 million. Since starting the program in August 2025, SharpLink has bought back 4,071,223 shares for a combined $41.7 million.

Although the offering increased the number of outstanding shares, the repurchases removed a smaller block from public ownership. SharpLink has described both transactions as part of its effort to manage the amount of ETH attributable to each share.

The Nasdaq-listed company joined the Russell 2000 and Russell 3000 indexes during their June reconstitution, making SBET eligible for ownership by U.S. funds that track those benchmarks. Its shares closed at $6.43 on Aug. 7, gaining 2.23% during the session before the results were published.

SharpLink’s treasury had increased to approximately 888,938 ETH and ETH equivalents by Aug. 3. After the quarter ended, it also committed $100 million to the $125 million Galaxy SharpLink Onchain Yield Fund, with Galaxy contributing the remaining $25 million and serving as its investment manager.