US gaming company Sharplink Gaming announced plans to invest $1 billion to build an Ethereum vault, but its stock price plummeted by more than 70% due to an SEC filing. Although senior management rushed to clarify market misunderstandings, the turmoil seems to highlight a deeper question: "When crypto asset reserves are combined with traditional stock market investors, does it magnify the psychological and narrative gap and plant instability in the market?"
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ToggleFrom soaring hotspot to flash crash crisis: the prelude to the sharp drop of Sharplink
Sharplink Gaming became a hot topic in late May when its stock price surged more than 20 times after announcing the establishment of an Ethereum treasury. The company raised $425 million from institutions including Consensys, Galaxy Digital, and Pantera Capital through the private equity investment (PIPE) model.
Last week, the company announced a plan to purchase up to $1 billion in ETH, further deepening its Ethereum reserve strategy.
However, just two weeks later, Sharplink submitted an S-3 form to the SEC yesterday, registering more than 58.7 million shares for possible future resale, but this was interpreted by the market as an "imminent large-scale sell-off", triggering panic selling. The stock price plummeted to below US$8 after hours, with the maximum intraday decline exceeding 73%.
Lubin clarified that there was no actual stock selling, but it still couldn't stop the collapse of market trust
Joseph Lubin, chairman of Sharplink and CEO of Consensys, immediately posted a message on X to clarify the rumor, emphasizing that neither Consensys nor he himself sold any shares:
This S-3 document is the standard process for PIPE financing in traditional finance. It is only used to register potential future resale rights, not actual sales.
It is not difficult to see that such an explanation is obviously beyond the market's ability. After all, for most investors, even if they believe in management, they may choose to sell first when any bad news appears, which directly leads to a sell-off stampede.
Can traditional financial investors really withstand the volatility of crypto assets?
Although the logic of using ETH as an asset allocation for the team's treasury is generally common in the crypto field, for listed companies such as Sharplink, most of their investors come from traditional markets and may lack the psychological preparation to face the volatility of crypto assets.
This is the core contradiction of this type of " Bitcoin Acquisition Vehicles " model: "Investors in stocks tend to see predictable revenue growth and stable cash flow, but crypto assets bring unpredictable volatility and narrative changes."
In other words, if there is any disturbance in the investment target, these investors may be the first to jump ship.
Sygnum: Transforming cryptocurrencies without narrative support is just risk transfer
Sharplink is not the only public company exploring crypto asset reserves. From MicroStrategy to Tesla , GameStop and even Trump Media , they are all using stocks to package crypto asset narratives. However, the key to success or failure lies in whether the company has the ability to control the narrative.
Take MicroStrategy as an example. Its success is partly due to Michael Saylor himself as a strong voice for the BTC narrative. However, if other companies do not have similar leaders, the investor structure does not meet expectations, and the main business is not profitable, the risks after the hype will be magnified several times.
( CZ on Bitcoin Reserve: Not taking risks is the biggest risk! )
As I pointed out in a previous report: "When investors don't know whether they are buying technology stocks, financial stocks, or cryptocurrency investment funds, such confusion itself is a risk ."
Rethinking “crypto reserves”: Not every company can follow MicroStrategy’s path
The Sharplink incident reminds the market that crypto reserve companies are not a panacea for solving a company’s financial difficulties: “ Instead of letting stock companies bear the volatility of cryptocurrencies, it is better to focus on core business transformation or return to crypto native. ”
If more companies continue to try to replicate this " cryptocurrency as a hype narrative " model in the future, investors will also need to have higher risk assessment standards for such companies to prevent traditional finance from becoming a replica of crypto volatility.
Risk Warning
Cryptocurrency investment carries a high degree of risk. Its price may fluctuate drastically and you may lose all your capital. Please assess the risk carefully.
U.S. stocks closed slightly higher last night, as the market focused on inflation and unemployment data while digesting Trump's latest remarks on the Federal Reserve (Fed), tariffs and the situation in the Middle East. At the same time, the Israeli-Iranian conflict broke out again, and Boeing suffered another major air crash, with its stock price falling nearly 5%. Overall, the three major U.S. stock indexes all closed higher, and the market once again bet that the Fed will start cutting interest rates this year. Bitcoin (BTC) fell from 108K to 103K, a drop of nearly 4.8%. Ethereum (ETH) fell to $2,498, a drop of nearly 10% .
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ToggleTrump calls on trade allies to accept tariffs and asks the Fed to cut interest rates quickly
Trump once again called on trade allies to accept the unilateral setting of tariff rates by the United States on Wednesday (June 11) Taiwan time, and even said "if you don't accept it, then forget it."
On Thursday (6/12), Trump once again publicly called on the Federal Reserve (Fed) to cut interest rates, and directly called Fed Chairman Jerome Powell a "stupid" and then said that he would not fire him.
Inflation and unemployment data are released, and the market expects the probability of interest rate cuts to increase
The U.S. Producer Price Index (PPI) in May increased by 2.6% year-on-year and 0.1% month-on-month, both lower than market expectations, indicating that inflationary pressures continue to ease. However, the U.S. job market is showing signs of fatigue:
Initial jobless claims reported 248,000: higher than expected
The number of people continuing to receive unemployment benefits is 1.956 million: higher than the previous value
This also further increased market expectations that the Federal Reserve would cut interest rates twice, driving bond market buying momentum back, U.S. Treasury yields down, and demand for U.S. 30-year Treasury auctions up.
Boeing suffered another major air crash, and the conflict between Israel and Iran broke out
Boeing has had two fatal air crashes and a door detachment incident in the past five years. Now, its own Boeing 787 crashed at Sardar Vallabhbhai Patel International Airport shortly after taking off at 1:38 pm local time in India, killing more than 290 people and leaving only one person alive. After the news broke, Boeing (BA-US) stock fell 4.79% to close at $203.74 per share.
U.S. President Donald Trump warned at a press conference on June 11, Taiwan time, that relevant personnel and military families stationed in the Middle East are currently being evacuated from Israel. He said: "It is very dangerous over there right now, just wait and see." Israel then launched an airstrike on Iran in the early hours of Friday morning local time, targeting Iran's nuclear program facilities.
( Israel raids Iran's nuclear facilities and declares a "state of emergency" across the country )
BTC fell to the 103K range, ETH fell nearly 10%
Bitcoin (BTC) fell from yesterday's highest price of $108,813 to $102,664, and then pulled back to the 103K range, a drop of nearly 4.8%. Ethereum (ETH) fell from yesterday's highest price of $2,783 to $2,450, a drop of nearly 10%.
The highly anticipated US stablecoin bill, the GENIUS Act, passed a procedural vote in the Senate on June 11, Eastern Time, and is ready to enter the deliberation stage. Once passed, it is expected to bring benefits to the crypto market.
Risk Warning
Cryptocurrency investment carries a high degree of risk. Its price may fluctuate drastically and you may lose all your capital. Please assess the risk carefully.
Tensions in the Middle East have risen again. Israel launched an airstrike on Iran early Friday morning, targeting Iran's nuclear program facilities. Israeli Defense Minister Israel Katz immediately declared a "special state of emergency" across the country and warned that Iran might launch retaliatory missile and drone attacks on the Israeli mainland. The United States denied involvement, emphasizing that this action was a unilateral action by Israel and that the US military would focus on protecting the safety of its troops in the Middle East.
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ToggleIsrael launches strike on Iranian nuclear targets, calls it a "preventive strike"
According to NBC and the Associated Press , the raid took place early Friday morning local time with the goal of "weakening Iran's nuclear program." Israeli Defense Minister Katz said it was a preventive strike to prevent potential attacks and officially signed an order declaring a "state of emergency" across Israel.
"We anticipate an imminent Iranian missile and drone attack on Israeli territory and civilians," Katz warned in a statement. "Therefore, please follow the instructions of the Homeland Defense Command and authorities, enter protected areas and remain alert."
The United States denied involvement in the operation and stressed the need to protect its own troops
U.S. Secretary of State Marco Rubio said the operation was "a unilateral Israeli action" and that the United States was not involved. He stressed that the U.S.'s top priority is to protect U.S. troops stationed in the Middle East, and pointed out: "We are in touch with Israel, and they believe that this operation is for self-defense. President Trump and the U.S. government have taken all necessary measures to ensure the safety of our troops in the region."
Rubio also warned Iran: "Do not target the United States for retaliation. We will protect our people and interests."
Trump ordered the withdrawal of some U.S. troops and stressed that Iran must not possess nuclear weapons
Shortly before the airstrike, US President Trump announced that some US personnel would be withdrawn from the Middle East. He admitted: "It could become very dangerous there." Trump reiterated that the United States would never allow Iran to have nuclear weapons. This statement shows that the US position on Iran's nuclear threat has become tougher.
This is in stark contrast to the indirect negotiations between the United States and Iran a few weeks ago, when both sides maintained a "positive" and "respectful" dialogue atmosphere. Now the situation has taken a sharp turn for the worse, causing the international community to worry about the escalation of the conflict.
Social media video of explosions and air defense response in Tehran exposed
Although the authorities have not yet fully disclosed the details of the attack, several videos have gone viral on social media, showing explosions in the east of the Iranian capital, Tehran, with the sound of planes whirring in the air and anti-aircraft missiles being activated. NBC News pointed out that similar sounds of air defense systems responding could also be heard in northern Tehran, indicating that Iran has quickly entered a state of emergency.
There has been no complete official response from Iran to the airstrike, but many expect Iran to retaliate against Israel in some form, which could further escalate the military standoff in the entire Middle East.
The situation in the Middle East is unclear, and the international community is paying close attention to subsequent developments
This airstrike will undoubtedly further escalate the already tense situation in the Middle East. Will Israel continue its military operations against Iran? Will Iran retaliate? Will the United States be drawn into the conflict? All parties are watching to see how the situation develops. The international community calls on both sides to exercise restraint and avoid further escalation of the conflict into a full-scale war.
Risk Warning
Cryptocurrency investment carries a high degree of risk. Its price may fluctuate drastically and you may lose all your capital. Please assess the risk carefully.
