Ethereum News Today: SharpLink Gaming Faces 24.6 Million Share Dilution Risk From ETH Accumulation

Daniel Yan, the founder and CIO of Kryptanium Capital and a managing partner at Matrixport Ventures, has raised concerns about the comparison between SharpLink Gaming (SBET) and MicroStrategy (MSTR). Yan argues that while both companies have been accumulating cryptocurrencies, their strategies and risks differ significantly.

SharpLink Gaming has rapidly transformed into one of the largest corporate holders of Ether, amassing 280,706 ETH (approximately $925 million) and staking nearly all of it. To fund this accumulation, SharpLink sold 24.6 million shares for $413 million via an at-the-market (ATM) facility. Yan warns that this method of constant equity issuance creates a massive dilution effect on the ETH-per-share metric, making SBET's price more vulnerable to negative shocks.

In contrast, MicroStrategy's Bitcoin strategy relies on cheap, long-dated leverage. The firm has floated $8.2 billion of convertible notes, all funnelled into BTC, and only secondarily tapped its own ATM shelf. Because converts embed an equity option, they dilute only if MSTR’s share price leaps, effectively synchronising new issuance with bullish sentiment. Yan calls this a “flywheel” that SBET lacks.

Yan also highlights governance asymmetry. SharpLink was recapitalised by a consortium of ETH holders, whose own SBET shares unlock in roughly five months. This arrangement could incentivise insiders to monetise quickly rather than steward a long-term treasury strategy. No comparable unlocking event hangs over MicroStrategy, whose executive chairman Michael Saylor owns the bulk of the voting stock and has repeatedly pledged never to sell.

Yan’s comments come as Ether ETFs smash records. US spot funds absorbed $726.6 million in net inflows on Wednesday, their best day since launch, lifting cumulative holdings above 5 million ETH. While Yan concedes there is merit in this for the short term, he urges investors to scrutinise capital-structure mechanics. If SharpLink’s insiders treat the company as a short-term vehicle and ETF momentum cools, the ATM-powered “flywheel” could spin the opposite way: more shares, lower ETH-per-share, weaker SBET.

Conversely, if Ether keeps climbing and the firm times its issuance astutely, shareholders could still enjoy MicroStrategy-style convexity. The difference, as Yan makes clear, is that SharpLink’s leverage is worn on the cap table, not tucked inside a convertible note.