Sharplink (NASDAQ; SBET) has reported a $394.3 million net loss for the second quarter of 2026 despite an elevenfold jump in its revenue. 

The loss on the company’s balance sheets is due to non-cash writedowns on its Ethereum treasury. Sharplink’s stock (SBET) has also taken a hit, falling 6%,

How did SharpLink lose $394 million?

Sharplink reported a $321.0 million unrealized loss on its Ether as ETH prices fell during the second quarter of 2026. The company’s earnings release also showed a $76.1 million impairment on two liquid staking tokens, LsETH and weETH. Both figures are accounting marks under U.S. GAAP. They cut the carrying value of the holdings on paper. 

The company noted the impairments are not reversed if the market later recovers, but they do not change how many tokens Sharplink actually owns. Realized gains offset part of the damage.

Sharplink is currently in a worse position than it was a year ago, when it reported a loss of $103.4 million. However, the almost $400 million figure is an improvement on the company’s Q1 2026, when Cryptopolitan reported a $685.6 million loss driven by the same fair-value mechanics on a bigger ETH drawdown.

Despite the massive losses, Sharplink took in $11.5 million for the three months to June 30, up from $0.7 million a year earlier, with $11.2 million of that coming from ETH staking rewards. 

The jump reflects the actively managed treasury strategy the company launched on June 2, 2025, running for a full quarter this time rather than a few weeks.

Costs climbed alongside the revenue, with selling, general and administrative expenses reaching $9.1 million, up from $2.4 million a year earlier. Since then, Sharplink has absorbed heavier personnel, custody, insurance, legal and accounting bills that come with operating a public crypto-treasury business at scale.

Will Sharplink ditch its Ethereum holdings? 

The paper losses have not slowed the company’s accumulation of ETH. Sharplink held roughly 886,881 ETH at the end of June and about 888,938 ETH by August 3, worth around $1.4 billion on a GAAP basis at quarter-end. 

On June 23, it closed a $75.0 million registered direct offering, selling just over 10 million shares plus warrants at $7.49 per unit, and used part of the proceeds to buy about 10,000 ETH at an average of roughly $1,611.

The company also kept buying back its own stock, repurchasing about 2.1 million shares for around $10 million during the quarter. Since it began buybacks in August 2025, Sharplink has retired 4,071,223 shares for about $41.7 million. In June, index provider Russell added the stock to its 2000 and 3000 indexes.

Once the report was released, SBET fell by 6% and is now trading at $6.05. 

After the quarter closed, Sharplink and Galaxy Digital (NASDAQ: GLXY) launched the Galaxy Sharplink Onchain Yield Fund with $125 million in committed capital. Sharplink is contributing $100 million from its staked ETH treasury, and Galaxy is adding $25 million and managing the vehicle.

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