Is Bitcoin no longer appealing? Four listed companies bet on Ethereum's new money-making strategy

Author: Christopher Rosa

Compiled by: Saoirse, Foresight News

Michael Saylor's innovative strategy at MicroStrategy (stock code MSTR) is groundbreaking. By significantly increasing his Bitcoin holdings through financial instruments, he sparked a trend among corporations. Since then, over 50 companies have followed his Bitcoin-centric treasury strategy, and this number continues to rise. However, a group of visionary companies is now taking a different approach: they are not only seeking exposure to cryptocurrencies but are also focusing on deeply aligning with Ethereum's own economic engine.

In this report, we will focus on the first four U.S. publicly traded companies that have established Ethereum reserves, analyzing their financing activities, assessing their "Ethereum concentration" (the amount of Ethereum held per share), and examining the market premium investors assign to these Ethereum-backed corporate treasury reserves. In addition to these metrics, we will explore the broader implications of this phenomenon on the health of the Ethereum network, the staking ecosystem, and DeFi infrastructure, emphasizing that these treasury strategies not only reshape corporate balance sheets but also inject capital directly into the core areas of Ethereum's decentralized economy.

SharpLink Gaming (SBET)

Company Background

SharpLink Gaming Ltd. (NASDAQ: SBET) was founded in 2019 and is a technology company. It matches sports enthusiasts with timely sports betting and interactive gaming services through its proprietary platform, converting them into betting users. Additionally, the company develops free games and mobile applications, providing marketing services to sports media organizations, leagues, teams, and betting operators to enhance fan engagement. Moreover, SharpLink operates live fantasy sports and simulation games, with over 2 million users and an annual spend of nearly $40 million. The company has also obtained operating licenses in all U.S. states where fantasy sports and online betting are legally permitted.

Last month, SharpLink began accumulating Ethereum (ETH) on its balance sheet and financed these acquisitions through a combination of private investment in public equity (PIPEs) and at-the-market (ATM) offerings. The company's management team stated that this strategic shift stems from their strong confidence in Ethereum's future, believing that as a revenue-generating, programmable digital asset, it can allow the company to profit from staking and related opportunities. Despite adopting this novel financial strategy, SharpLink remains fully focused on its core gaming and interactive betting business, with the Ethereum treasury strategy serving as a supplement rather than a replacement for its core operations.

Financing and Ethereum Acquisition

SharpLink has steadily used funds raised through equity financing in 2025 to purchase over 215,634 Ethereum, indicating that the company is rapidly transforming into an Ethereum-backed treasury model.

Ethereum Deployment and Staking

SharpLink has staked all of its Ethereum reserves, earning a reward of 100 Ethereum from June 28 to July 4. Since the staking program began on June 2, the total staking rewards have reached 322 Ethereum.

Key Points

SharpLink Gaming's strategic move into Ethereum has made it the publicly traded company with the largest Ethereum reserves. Through multiple rounds of equity financing (including a large $425 million private equity investment and subsequent ATM offerings), the company has quickly accumulated the largest Ethereum holdings in the industry. Although this treasury strategy carries risks (including the impact of Ethereum price volatility), it also holds significant staking yield potential, highlighting the appeal of proof-of-stake digital assets as treasury reserves. By staking 100% of its Ethereum reserves, SharpLink not only generates income but also contributes directly to the security and stability of the Ethereum network. This enriches the diversity of validator participation and creates a synergy between corporate capital and the healthy development of the protocol.

BitMine Immersion Technologies (BMNR)

Company Background

BitMine Immersion Technologies Inc. (NYSE American: BMNR) is a blockchain infrastructure company based in Las Vegas, operating industrial-scale Bitcoin mining facilities, selling immersion cooling hardware, and providing hosting services for third-party mining equipment in regions with lower energy costs, such as Texas and Trinidad.

On June 30, the company raised approximately $250 million through a private placement of 55.6 million shares (priced at $4.50 per share) to expand its Ethereum reserves. As part of the transaction, Fundstrat co-founder Tom Lee was appointed as chairman of BitMine's board, adding the guidance of a seasoned cryptocurrency strategist to the company's efforts to scale its Ethereum allocation.

Financing and Ethereum Acquisition

In late June, after completing the $250 million private placement, BitMine Immersion Technologies' stock was revalued, highlighting the company's shift towards an Ethereum-supported treasury model.

Ethereum Deployment and Staking

BitMine holds a significant amount of Ethereum reserves, but as of the writing of this article, there is no public information confirming whether it has actively staked any of its reserves or deployed them on-chain in other ways.

Key Points

Through the $250 million financing, BitMine added approximately 81,380 Ethereum to its balance sheet, bringing its total holdings to over 163,000 Ethereum. To support this reserve accumulation, BitMine diluted its post-offering equity to over 56 million shares, an increase of about 13 times. Such a scale of dilution underscores that implementing a large-scale Ethereum reserve strategy requires substantial equity issuance support, reflecting the capital-intensive nature of accumulating Ethereum in the public market.

Bit Digital (BTBT)

Company Background

Bit Digital Inc. (NASDAQ: BTBT) is a digital asset platform based in New York, founded in 2015, initially operating industrial-scale Bitcoin mining facilities in the U.S., Canada, and Iceland.

In June 2025, the company completed a fully underwritten public offering, raising approximately $172 million; simultaneously, it combined the proceeds from the sale of 280 Bitcoin with the offering funds to reinvest in Ethereum, accumulating approximately 100,603 Ether. Under the leadership of CEO and cryptocurrency veteran Sam Tabar, the company has transitioned to an Ethereum staking and treasury reserve model.

Financing and Ethereum Acquisition

This chart traces Bit Digital's equity financing from June to July, the sale of 280 Bitcoin, and the reallocation of those funds to acquire over 100,000 Ethereum, highlighting the company's shift towards an Ethereum-centric treasury model.

Ethereum Deployment and Staking

As of March 31, Bit Digital held approximately 24,434 Ethereum, of which 21,568 were actively staked, with an average annualized yield of 3.2% for Ethereum staking in 2024.

After the strategic adjustment, Bit Digital significantly expanded its Ethereum reserves through public offerings and the sale of Bitcoin, increasing its total holdings to 100,603 Ethereum. Although the company has not disclosed the specific staking amounts and expected yields post-transition, its past operations indicate a continued focus on generating income through Ethereum staking.

Key Points

Bit Digital's transformation of its treasury reserves is particularly noteworthy: it combines traditional public equity financing with the unconventional move of liquidating Bitcoin holdings to purchase Ethereum. This strategy sets Bit Digital apart among publicly listed cryptocurrency companies, demonstrating its strong confidence in Ethereum's revenue-generating capabilities. Compared to Bitcoin's passive role on the balance sheet, Ethereum's advantages are more pronounced.

GameSquare (GAME)

Company Background

GameSquare Holdings (NASDAQ: GAME) is a gaming media group based in Texas, owning brands such as FaZe Clan, Stream Hatchet, and GCN, focusing on creating creator-led marketing content for global advertisers targeting Gen Z gamers. In July, the company raised approximately $8 million through a follow-on equity offering and partnered with cryptocurrency company Dialectic to launch an Ethereum treasury reserve plan, aiming to allocate up to $100 million in Ethereum with a target yield of 8% to 14%.

Financing and Ethereum Acquisition

This table outlines the situation of GameSquare's initial public equity financing, aimed at funding its Ethereum treasury strategy in collaboration with Dialectic.

Ethereum Deployment and Staking

As part of a broader digital asset reserve strategy, GameSquare has completed its first Ethereum purchase, acquiring $5 million worth of Ether. This move marks the company's official entry into the cryptocurrency reserve space, aiming to diversify its assets and support long-term innovation.

Key Points

GameSquare's shift to an Ethereum treasury strategy represents a bold expansion beyond its core gaming media business. By collaborating with Dialectic and leveraging its Medici platform, GameSquare plans to invest funds into the DeFi space to achieve returns significantly higher than standard Ethereum staking yields (typically 3% to 4%) (8% to 14%). If this strategy is successfully implemented, it will directly contribute to the stability and development of the entire Ethereum ecosystem by enhancing liquidity in key DeFi protocols and enriching validator participation structures. The active involvement of corporate capital will further solidify the foundation of DeFi infrastructure.

Ethereum Concentration

The "Ethereum concentration" metric was initially proposed by SharpLink Gaming, providing investors with a clear and comparable measure to assess the exposure of publicly traded companies building Ethereum reserves. This metric is centered on "the amount of Ethereum held per 1,000 diluted shares outstanding," accounting for all potential equity dilution factors such as warrants, stock options, and convertible instruments. The Ethereum holding data presented comes either from direct company disclosures or is estimated based on their announced full equity financing allocated to Ethereum. The diluted share count is sourced from company filings, Bloomberg, SEC documents, and financial databases, ensuring consistency and accuracy across different companies. This metric provides investors with an intuitive tool to evaluate relative Ethereum exposure levels on a per-share basis.

This table compares the "Ethereum concentration" of publicly traded companies employing Ethereum treasury strategies, indicating the amount of Ethereum held or planned to be held per 1,000 diluted shares.

Market Capitalization Premium and Book Value of Ethereum Reserves

Comparative analysis of the market capitalization premium of publicly traded companies against the book value of their Ethereum holdings.

The above chart illustrates the relationship between each company's market capitalization and the book value of their Ethereum holdings (calculated as "total Ethereum held × $2,600 cost per Ether"). A higher premium multiple indicates that investors value the company's strategic flexibility or future earnings far beyond the value of its underlying Ethereum assets. GameSquare (GAME) leads with a premium of approximately 13.8 times, highlighting the market's optimism regarding its early Ethereum reserve build-up; BitMine (BMNR) has a premium of about 5 times following its latest $250 million financing; while Bit Digital (BTBT) and SharpLink (SBET) have relatively moderate premiums, reflecting more restrained market expectations. However, like all cryptocurrency reserve strategies, a significant drop in Ethereum's price could exacerbate downside risks associated with high premiums.

Comparison of Ethereum and Bitcoin Reserve Models

The rise of Ethereum reserves signifies a significant strategic evolution among publicly traded companies focused on cryptocurrency business. The Bitcoin model centers around "digital gold," emphasizing the passive preservation or appreciation of reserves; whereas Ethereum goes further, creating active yields through staking and DeFi strategies, which adds extra appeal.

The four companies mentioned above clearly position Ethereum as a yield-generating reserve asset. SharpLink and BitMine have committed (or plan) to stake 100% of their Ethereum holdings to maximize the rewards from protocol-level staking; GameSquare, through its collaboration with cryptocurrency company Dialectic, seeks to achieve risk-adjusted returns of 8%-14% through more complex DeFi strategies, deepening this model. This preference for "yield-generating Ethereum" stands in stark contrast to Bitcoin's reserve "non-yielding passive model," marking a shift in corporate capital management from solely relying on asset price appreciation to achieving balance sheet growth through active operations.

Unlike many Bitcoin reserve companies that heavily rely on convertible debt and leverage (see Galaxy's latest research report), the four leading Ethereum reserve companies—SharpLink, BitMine, Bit Digital, and GameSquare—fully finance their Ethereum reserves through equity offerings. This means they do not face the pressures of debt maturity or interest payment obligations, and there is no default risk even in a downturn in the cryptocurrency market. The non-leveraged model significantly reduces systemic vulnerability, avoiding refinancing and equity dilution risks associated with deeply in-the-money convertible debt.

The key point is that these Ethereum reserve strategies introduce a structural innovation: productive capital. By staking Ethereum, these companies not only earn the typical 3%-5% native protocol yield but also contribute directly to the security and stability of the Ethereum network. The higher the amount of Ethereum staked by corporate holders, the more stable and predictable the network validator ecosystem becomes, creating a long-term synergy between corporate capital and the healthy development of the protocol.

In fact, as of July 9, the amount of Ethereum staked reached a historical peak (over 35 million, accounting for more than 30% of the total supply), and the rise of Ethereum reserve companies may be one of the key drivers of this trend.

For example, GameSquare plans to advance yield-enhancing strategies through partners like Dialectic, deploying its Ethereum reserves into lending, liquidity provision (market-making), and re-staking, among other native DeFi foundational activities. This not only amplifies potential returns but also strengthens the ecological foundation of the Ethereum core protocol by enhancing liquidity and attracting institutional participation in decentralized markets.

Who Will Face the Greatest Equity Dilution Risk?

The image compares the impact of private investment in public equity (PIPE), at-the-market (ATM) offerings, and public stock offerings on equity dilution, highlighting which companies face the greatest short-term risks.

Investors need to carefully assess the behavior of equity financing that adds new shares to the market, especially in the case of PIPE transactions, which can dilute existing shareholders' equity and exert pressure on stock prices. BitMine's large-scale PIPE issuance exposes it to significant dilution risk and stock price volatility in the short term; SharpLink's combination of PIPE and ATM financing will result in immediate dilution and ongoing incremental pressure. In contrast, Bit Digital and GameSquare employ more transparent traditional public offerings, making dilution clearer and more controllable, with relatively lower market risk.

Overall, companies opting for PIPE structures face higher initial market impact risks compared to ATM and traditional public offerings (especially during periods of market volatility). However, all these equity-centric financing strategies avoid the "high-leverage convertible debt" characteristics relied upon by Michael Saylor at MicroStrategy.

Conclusion

On the surface, the dramatic fluctuations of Ethereum reserve-related stocks may resemble the "speculative boom-bust cycles" common with meme coins, but the strategies employed by the first companies to establish Ethereum reserves are fundamentally different. These companies do not rely on hype or passive asset holding; instead, they position Ethereum as a "productive reserve asset," generating native yields through staking or, in some cases, deploying more complex DeFi strategies. This characteristic sharply contrasts with the pioneers of Bitcoin reserves, who follow the "passive digital gold" model and often finance their holdings through high-leverage convertible debt. In contrast, SharpLink, BitMine, Bit Digital, and GameSquare, the four Ethereum reserve companies, support their strategies through equity financing, thereby avoiding the structural vulnerabilities associated with debt repayment pressures and peaks in debt maturity.

Moreover, this capital is not idle. By staking Ethereum, companies directly contribute to the security of network validators and the stability of the protocol layer; companies like GameSquare, which plan to implement DeFi-native yield strategies, may inject vitality into Ethereum infrastructure such as liquidity provision and lending markets.

Although challenges such as dilution risk, smart contract exposure, and price volatility remain, investors can use tools like dilution impact analysis and premium-to-book value ratios to comprehensively assess downside risks and the upside potential driven by returns. Ultimately, this first batch of Ethereum reserve models showcases a more deeply engaged and productive capital operation. While it has given rise to a class of on-chain corporate reserves exposed to market volatility, this model may still inject momentum into the strengthening of the Ethereum ecosystem.

Disclosure: As of the date of this report, affiliated entities of Galaxy Digital are currently invested in BitMine and SharpLink Gaming.