SharpLink Gaming, the Nasdaq-listed company that became one of the world's largest corporate Ethereum holders this year, has transferred more than $17 million worth of ETH to Galaxy Digital's over-the-counter desk, sparking speculation about potential asset sales as the company faces nearly half a billion dollars in unrealized losses.
The transfer of 5,442 ETH, valued at approximately $17.02 million, was flagged by on-chain analytics platform Onchain Lens using data from Arkham Intelligence. The transaction occurred approximately four hours before public disclosure and represents just a fraction of SharpLink's total holdings, which currently stand at approximately 861,000 ETH.
The move has raised immediate concerns that SharpLink may be attempting to reduce its exposure during a period of intense market volatility. Ethereum has fallen sharply in November, dropping below the key $3,000 level as ETF outflows and liquidations shake the broader crypto market. The selloff has erased billions from crypto market capitalizations and pushed investor sentiment into "extreme fear" territory.
Mounting Unrealized Losses
SharpLink's financial position has deteriorated significantly as Ethereum's price has declined. The company faces challenging market conditions that have resulted in approximately $430 million in unrealized losses on its ETH holdings.
Since launching their treasury strategy on June 2, 2025, SharpLink has acquired Ethereum at various price points, with an average purchase price currently estimated around $3,609 per ETH. With Ethereum now trading near or below that cost basis, the company's massive bet on the world's second-largest cryptocurrency faces its first serious test.
The transfer to Galaxy Digital, a prominent digital asset management firm founded by Michael Novogratz that provides OTC and market-making services, suggests SharpLink may be exploring options beyond simply holding through the downturn. OTC desks allow large institutional holders to execute significant transactions without causing price slippage or market impact, providing privacy that exchange-based trades cannot offer.
"With ETH trading near this cost basis, this move strongly suggests a possible OTC sale or a major portfolio rebalancing to reduce risk exposure," one crypto investor noted on social media.
Stock Price Collapse Compounds Concerns
The pressure on SharpLink extends beyond its crypto holdings. SBET shares have declined from highs above $45 earlier in 2025, when enthusiasm for the firm's Ethereum pivot briefly pushed the stock higher, to current levels around $10-14. At its peak, SBET traded above $80, meaning current shareholders have seen more than 85% of their investment value evaporate.
The stock now trades at a discount to its net asset value, a troubling sign for a company structured as a digital asset treasury. A token trading below its net asset value means the market price doesn't fully reflect the value of the underlying assets—in this case, SharpLink's substantial ETH position.
This discount reflects broader concerns about the digital asset treasury sector. Bitwise Chief Investment Officer Matt Hougan recently argued that only companies executing complex, value-adding crypto strategies deserve to trade at a premium, while those taking the "lazy approach" of simply buying and holding will likely trade at a discount.
"In the end, DATs are just companies," Hougan said. "Good companies get rewarded for doing hard things well over time. Bad companies that execute poorly or try to take the easy route to riches get punished."
Strong Q3 Results Contrast with Current Pressures
Despite the unrealized losses and stock decline, SharpLink posted impressive third-quarter results that suggest its underlying strategy is generating value. The company reported total revenue of approximately $10.8 million in Q3 2025, up more than 1,100% from $0.9 million in the same period last year, driven by strong performance from its actively managed ETH treasury.
Net income rose sharply to approximately $104.3 million, or $0.62 per fully diluted share, compared to a net loss of approximately $885,000 in the prior year's third quarter. This marked one of the first profitable quarters for an ETH-focused digital asset treasury company.
Co-CEO Joseph Chalom emphasized that the results validated the company's execution. "To date, we've deployed nearly all of our ETH holdings into productive, yield-generating staking, while maintaining disciplined risk management," he stated. "Importantly, we've doubled our ETH per share concentration from 2.0 to 4.0 since inception of the treasury."
Staking Rewards Continue Compounding
Despite the price decline, SharpLink continues generating income from its staked Ethereum position. The company announced it earned 492 ETH in staking rewards during the week ending November 11, bringing total cumulative rewards to 7,067 ETH since launching the strategy on June 2, 2025.
All of SharpLink's Ethereum remains fully staked through institutional-grade protocols, demonstrating a long-term commitment to the asset even amid market turbulence. The company describes Ethereum as "a productive and compounding asset that fits well in a corporate treasury."
This staking income has attracted attention from analysts who argue it gives Ethereum an edge over Bitcoin as a treasury asset. The consistent yield generation provides cash flow that pure Bitcoin holdings cannot match.
BitMine Maintains Lead in ETH Treasury Race
SharpLink currently ranks as the second-largest public Ethereum treasury company, behind Tom Lee's BitMine Immersion Technologies.
BitMine now possesses 3.6 million ETH, representing 2.9% of the total ETH supply, making it the world's largest Ethereum treasury and the second-largest overall crypto treasury behind Strategy's Bitcoin holdings.
The gap between the two companies has widened considerably, with BitMine pursuing an aggressive accumulation strategy aimed at controlling 5% of all Ethereum in circulation.
Broader Market Slowdown
The transfer comes amid a noticeable slowdown in ETH accumulation activity among digital asset treasuries. Purchases are no longer occurring daily as they did in previous months, signaling a shift in sentiment from aggressive accumulation to caution as 2025 draws to a close.
The broader crypto market remains under stress, with Bitcoin having dropped below $95,000 and the global crypto market cap sitting near $3.34 trillion, down significantly from early October levels above $4 trillion.
For SharpLink, the coming weeks will prove critical. If Ethereum recovers toward its average cost basis, the company's strategy will be vindicated. If prices continue declining, the pressure to realize losses or restructure holdings will only intensify.
Whether this transfer represents the beginning of a larger divestment or simply routine treasury management remains unclear. With 861,000 ETH still on its balance sheet, SharpLink remains a major player in the institutional Ethereum ecosystem - but one now navigating its first genuine crisis of confidence.