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SharpLink Gaming (SBET), a minor gambling company with a market cap of just $10 million, announced it had acquired approximately 163,000 Ethereum (ETH) through a $425 million private equity investment.
The news sent SharpLink’s stock soaring, with gains exceeding 500% at one point.
Crypto as a Market Catalyst
Buying cryptocurrencies may be becoming the new wealth code for US-listed companies to boost their stock prices.
The origin of this trend, of course, is MicroStrategy (now rebranded as Strategy, ticker MSTR), the company that first ignited this frenzy with its bold Bitcoin bet back in 2020.
Over five years, it transformed from an ordinary tech firm into a "Bitcoin investment pioneer." In 2020, MicroStrategy’s stock traded at just over $10; by 2025, it had skyrocketed to $370, with a market cap surpassing $100 billion.
Buying crypto not only inflated MicroStrategy’s balance sheet but also made it a darling of capital markets.
In 2025, the frenzy intensified.
From tech firms to retail giants and even small gambling companies, US-listed businesses are using cryptocurrencies to fuel their valuation engines.
What’s the secret behind this wealth code of inflating market caps through crypto purchases?
MicroStrategy: The Textbook Playbook
It all started with MicroStrategy.
In 2020, this enterprise software company kicked off the wave of crypto buying among US-listed firms. CEO Michael Saylor famously called Bitcoin "a more reliable store of value than the US dollar."
While the conviction was compelling, what truly set the company apart was its capital markets strategy.
MicroStrategy’s approach can be summarized as a "convertible bonds + Bitcoin" combo:
Low-cost fundraising via convertible bonds:
Since 2020, MicroStrategy has repeatedly issued such bonds with rates as low as 0%, far below market averages. For example, in November 2024, it raised $2.6 billion in convertible debt at near-zero cost. These bonds allow investors to convert into equity at a fixed price, effectively granting them a call option while providing the company with cheap capital.
Deploying proceeds into Bitcoin:
MicroStrategy funneled all raised funds into Bitcoin, making it the core asset on its balance sheet.
Leveraging the "flywheel effect":
As Bitcoin surged from $10,000 in 2020 to $100,000 in 2025, the company’s asset value ballooned, attracting more investors to its stock. The rising share price then enabled MicroStrategy to issue more bonds or equity at higher valuations, raising additional funds to buy even more Bitcoin—creating a self-reinforcing cycle.
The core of this model lies in combining low-cost financing with high-return assets. By borrowing at near-zero rates to buy volatile but long-term bullish Bitcoin, and then amplifying valuations through crypto market enthusiasm, MicroStrategy rewrote its financial playbook—and provided a blueprint for others to follow.
SharpLink: A Shell Game with Ethereum
SharpLink Gaming (SBET) refined this strategy—but with Ethereum (ETH) instead of Bitcoin.
Behind the scenes, it also showcased a clever marriage between crypto power players and public markets.
Its approach can be described as a "shell company" play, leveraging a listed entity’s structure and crypto narrative to inflate valuations rapidly.
Originally a struggling micro-cap on the brink of Nasdaq delisting (with shares below $1 and shareholder equity under $2.5 million), SharpLink had one critical asset: its Nasdaq listing status.
This "shell" attracted attention from crypto heavyweights, including ConsenSys, led by Ethereum co-founder Joe Lubin.
In May 2025, ConsenSys teamed up with crypto VCs like ParaFi Capital and Pantera Capital to take over SharpLink via a $425 million PIPE (private investment in public equity). They issued 69.1 million new shares at $6.15 apiece, securing over 90% control—bypassing the complexities of an IPO or SPAC. Lubin became board chairman, and ConsenSys announced plans to explore an "Ethereum treasury strategy" with SharpLink.
Dubbed the "Ethereum version of MicroStrategy," SharpLink’s real purpose wasn’t to revive its gambling business but to serve as a bridge for crypto capital to enter public markets.
ConsenSys plans to use the $425 million to buy ~163,000 ETH, positioning SharpLink as a publicly traded proxy for institutional investors who can’t hold ETH directly.
The Three-Step Flywheel
Low-cost capital raise:
The PIPE at $6.15/share ($425M total) avoided the regulatory hurdles of traditional fundraising.
Narrative-driven stock surge:
The "Ethereum reserve asset" story ignited speculative buying, pushing SharpLink’s valuation far beyond its ETH holdings’ NAV.
Recycling capital:
Higher share prices enable follow-on offerings to raise more funds, buy more ETH, and repeat the cycle—inflating the valuation snowball.
But beneath this "capital alchemy" lurks froth. SharpLink’s core gambling business remains irrelevant, and its $425M ETH bet is entirely disconnected from fundamentals. The surge is purely speculative.
The truth? Crypto players are exploiting small-cap shells to pump valuations via "buy crypto, go viral" tactics.
Imitation Isn’t Always Flattery
While crypto buying seems like a surefire wealth code for US-listed firms, not all copycats succeed.
GameStop (GME):
On May 28, the meme-stock darling announced a $512.6M Bitcoin purchase (4,710 BTC). Markets yawned—shares fell 10.9%.
Addentax Group (ATXG):
A Chinese textile firm with a $4.5M market cap pledged to buy 8,000 BTC (~$864M) and Trump’s TRUMP token. Its purchase plan is 200x its market value.
Jiuzi Holdings (JZXN):
A Chinese EV retailer ($50M market cap) vowed to acquire 1,000 BTC (~$108M).
For latecomers, if Bitcoin prices fall, these leveraged bets could implode balance sheets.
A New Mainstream Narrative?
Despite risks, the trend may solidify.
In 2025, global inflation and dollar depreciation fears persist, driving more firms to treat Bitcoin and Ethereum as "inflation hedges." Japan’s Metaplanet has already ridden this wave, and US companies are accelerating their mimicry of MicroStrategy.
Cryptocurrencies are gaining visibility in global politics and economics—an "exit from the echo chamber" long touted by crypto believers.
Two paths dominate this mainstreaming:
Stablecoins:
Instruments like USDC (backed by US Treasuries) extend dollar hegemony into crypto markets.
Corporate crypto treasuries:
Public companies using crypto to inflate valuations—financial innovation or speculative bubble?
Whether this is "financial innovation" or "a韭菜收割机" depends on which side of the table you’re sitting.
