Summary I'm bullish on Ethereum (ETH-USD) due to its superior utility, programmability, and pivotal role in stablecoins and DeFi versus Bitcoin. SharpLink Gaming (SBET) offers leveraged, compounding exposure to ETH-USD through active treasury management, staking, and capital raises at market value. SBET's strategy may generate asymmetric upside versus direct ETH-USD ownership, but carries dilution and regulatory risks tied to aggressive fundraising and crypto regulation. With ETH's ecosystem poised for growth and SBET trading near NAV, I see SBET as a high-potential play for outsized returns as ETH adoption accelerates. I have been very public about my stance on Ethereum (ETH-USD) since The Genius Act was signed into law. I have been establishing a position in ETH-USD directly while gaining indirect exposure through ETF-USD based treasuries. As the landscape continues to evolve with digital assets SharpLink Gaming ( SBET ) was one of the first companies listed on the Nasdaq to a treasury strategy centered around ETH-USD. I believe that SBET could be an under the radar gem that will experience explosive growth as investors focus on treasuries such as Bitmine Immersion Technologies ( BMNR ) since Tom Lee from Fundstrat is now their chairman. ETH is back to it’s 2021 highs while Bitcoin (BTC-USD) has rallied by over 80% since the end of 2021 and I think there is a huge opportunity in ETH as the adoption of stablecoins emerges. From Robinhood ( HOOD ) to Palantir ( PLTR ) many companies have more than doubled over the past year leaving limited opportunities for outsized growth. While owning ETH-USD provides direct access to it’s price appreciation and staking yields, I believe SBET offers several potential advantages for investors seeking leveraged upside and strategic growth opportunities. SBET is able to raise capital through at-the-market ((ATM)) offerings and convertible notes to acquire more ETH at a lower effective cost than direct purchases. I believe that SEBT will generate asymmetric upside as it’s ETH-USD/share growth model could outpace direct ownership of ETH-USD if management executes on its strategy. Seeking Alpha Risks to investing in SBET While I am bullish on ETH-USD and SBET there are significant risks that investors should consider before allocating capital toward SEBT. SBET’s share price is correlated to the performance of ETH-USD as it’s a leveraged proxy for ETH-USD. SBET funds it’s ETH-USD purchases through ATM offerings and equity issuances which can be aggressive at times that can lead to large amounts of dilution. SBET has recently increased its ATM sales agreement by $5 billion, which may amplify the gains when ETH-USD moves higher but in periods of downward declines shares of SBET are likely to move significantly lower. SBET also faces evolving regulations around digital assets, stablecoins, and decentralized finance ((DeFi)). Making money on SBET depends on the adoption of ETH-USD’s underlying utility for smart contracts, tokenization, and a shift to stablecoins. If digitalization through DeFi doesn’t take off then the use case for ETH-USD could be severely impacted. Investors need the utility for ETH-USD to be scaled throughout different ecosystems as BTC-USD is already looked at as the store of value in the crypto space. Investors should do their own due diligence because there are many factors to consider when entering the crypto space through an ETH-USD treasury such as SBET. Seeking Alpha Why I am bullish on ETH-USD at this point in time and not BTC-USD BTC-USD and ETH-USD are the two largest cryptocurrencies and while BTC-USD has a vastly larger market cap than ETH-USD I don’t believe BTC-USD has anywhere near the utility that ETH-USD has. BTC-USD is often referred to as digital gold and looked at as a store of value but ETH-USD powers a vast programmable blockchain platform enabling decentralized applications ((dApps)), smart contracts, and more. While BTC-USD is a peer-to-peer electronic cash system with a fixed supply cap of 21 million coins using Proof-of-Work ((PoW)) for security, ETH-USD has taken the other side as it has an uncapped but deflationary supply mechanism via burning fees. This allows ETH-USD to host ecosystems like Layer 2 solutions while BTC-USD relies on sidechains like Lightning Network for faster transactions. ETH-USD is a programable blockchain for smart contracts and dApps and serves as the digital oil for fueling these economies. The gas for network fees in dApps enables tokenized payments, stablecoins and automated settlements in DeFi protocols which helps decrease the overall supply of ETH-USD with each transaction. Sharplink Gaming The open-source blockchain platform through ETH-USD is decentralized and allows the end users to create and execute smart contracts and dApps. Intermediaries like banks or governments aren’t needed for the transactions as the peer-to-peer network where participants maintain a shared ledger of transactions is managed through the ETH-USD network. The smart contract aspect is a self-executing program stored on the blockchain that automatically runs when predefined conditions are met, which can include transferring funds or executing trades. BTC-USD doesn’t have this level of utility which is why I believe the majority of stablecoins will be built on ETH-USD’s layer 2 ecosystem as they are designed to maintain a consistent value and bridge traditional finance and crypto by enabling fast, low-cost transactions while preserving stability. ETH-USD was built with the focus of digitization as it allows stablecoins to be programmed with automated mechanisms for maintaining their peg, such as collateralization, algorithmic adjustments, or reserves managed via decentralized autonomous organizations through its smart contract system. If BTC-USD was a better system to achieve these goals then I believe USDC , which is issued by Circle ( CRCL ), would have been built around BTC-USD’s framework rather than ETH-USD’s. President Trumps working group on digital assets has positioned the United States to be a leader in digital finance technology as they are looking to provide framework so the golden age of Crypto can be unleashed. A lot can be accomplished in a short period of time and if modernization of banking regulation for digital assets occurs I believe the amount of value generated throughout the ETF-USD ecosystem could be immense leading to upside potential for ETH-USD directly and ETH-USD treasuries such as SBET. Why I am bullish on SBET and buying it as a play on ETH-USD Currently, ETH-USD is trading for $4,748.82 and SBET’s reported ETH-USD holdings as of 8/19 were 740,760. This places the net asset value ((NAV)) of SBET’s ETH-USD at $3.52 billion and it’s market cap is $3.52 billion which means your getting ETH-USD exposure at a 1:1 price point through SBET. The business model for SBET is to raise capital to acquire ETH, stake 100% of the ETH so it’s yield compounds and concentrate all the ETH-USD in the portfolio by wrapping it into SBET to grow the ETH-USD per share for its shareholders. Since I live in New York I can’t benefit from staking ETH directly so purchasing SBET allows me to gain exposure of an asset I am long while having its management team stake ETH-USD to grow its holdings. To date SBET has earned 1,388 ETH-USD through staking its assets and that figure will only grow and continue to compound as SBET acquires more ETH-USD. SBET offers leveraged exposure, yield optimization, and institutional-grade management without paying a premium for the underlying ETH-USD in its treasury at the current share price. Sharplink Gaming X Page I believe that SBET has the ability to generate significant upside compared to owning ETH-USD directly. When I purchase ETH-USD directly my position remains static unless I add more capital. SBET is utilizing ATM offerings and registered direct placements to raise funds from investors then converting that capital to ETH-USD. This creates a compounding effect that I couldn’t achieve on my own and as ETH-USD appreciates in value SBET’s treasury also grows in value and enables them to issue ATM offerings at higher valuations. Through SBET’s active treasury management system purchasing an ETH-USD spot ETF increased by 1.4x from 5/27 to 7/30 while SBET’s share price increased by 3.3x which made it a significantly better investment for investors bullish on ETH-USD. SBET just authorized a stock buyback program in the amount of $1.5 billion. If SBET trades at or below the NAV of the ETH-USD in its treasury issuing new equity would dilute the ETH-USD concentration but if SBET can repurchase it’s stock in that scenario it would create the opposite impact and increase the amount of ETH-USD each remaining share represented. This would allow SBET to increase the ETH concentration through every share repurchase and compound the long-term value for shareholders. Sharplink Gaming Conclusion While ETH-USD has experienced over 1,100% of appreciation since August of 2020 I believe it’s still early as there is a tremendous amount of utility throughout the ETH-USD ecosystem. I believe that ETH-USD will be tied to stablecoins and tokenized assets whereas BTC-USD will just be looked at as a store of value. The true value in ETH is the future adoption and with a crypto friendly administration paving the way for digital assets I believe that there is a massive runway for the TAM of the assets that can be built on ETH-USD. SBET is an interesting opportunity as it’s currently trading at roughly a 1:1 ratio as ETH-USD and investors can tap into their ability to stake a massive amount of ETH-USD to generate a compounding yield as more ETH-USD is generated in addition to issuing ATM offerings to expand its treasury position. Since SBET started its ETH-USD treasury strategy it has generated more than double the appreciation of a standard ETH-USD spot ETF and as ETH-USD appreciates in value SBET could generate outsized returns. Ultimately, I am so bullish on ETH-USD that I think it can overcome BTC-USD as the largest cryptocurrency and SBET could amplify those returns by a large margin due to their strategy. I recently started a position in SBET and will actively be adding to my position as ETH could be one of the most interesting investments over the next several years. Sharplink Gaming