Sharplink shares have collapsed 91% in two weeks due to panic around ETH treasuries

Shares of Sharplink Gaming, the company chaired by Joe Lubin, have collapsed 91% in just two weeks, falling from $124 to $11. They slid sharply in OTC trading yesterday after the NASDAQ close, sparking panic amid uncertainty surrounding the company’s ETH treasury strategy. Trading volumes grew more than 10 times the average value.

The collapse was triggered by the announcement of a Form S-3ASR registration that allowed for the resale of more than 58 million shares. Many took this as a signal of potential capital dilution, especially after Sharplink loudly announced in March its intention to use ETH as the basis of a cryptocurrency treasury.

A tweet by analyst Stephen Zheng resonated, stating, “Every participant in the private placement got rid of the securities a month after the strategy was announced.” Investors perceived this as a flight from a project that until recently was considered the flagship of ETH finance.

A ConsenSys lawyer tried to quell the panic by calling the registration a “routine SEC procedure” and blaming the market for misunderstanding. No actual sales have occurred, he said, and investor reaction is unfounded fear.

Nevertheless, market participants in post-market trading ignored the official clarification. Sharplink, previously positioned as a cutting-edge crypto-treasury fund independent of bitcoin, has sharply lost credibility. This looks especially alarming against the background of Joe Lubin’s active role and the $450 million raised against ETH reserves.