LsETH Impairment Drives SharpLink Q2 Loss and 12% Share Drop
SharpLink Gaming posted a Q2 2025 net loss of $103.4 million, driven by an $87.8 million non-cash LsETH impairment under US GAAP. The firm treated liquid staked ETH as digital intangible assets without selling any ETH. At quarter-end, SharpLink holds 728,804 ETH, valued at about $3.5 billion, ranking it the second-largest corporate ETH holder. Revenue was $0.7 million with a gross profit of $0.2 million, while operating expenses rose to $2.3 million, including $16.4 million in stock-based compensation. Following the results, SharpLink shares fell 12% on the Nasdaq. Traders are watching how this LsETH impairment may reshape crypto firms’ balance sheets and ETH market dynamics as SharpLink doubles down on ETH accumulation and staking to power its DeFi-focused treasury strategy.
Neutral
Although the LsETH impairment drove SharpLink’s GAAP loss and triggered a 12% share drop, there were no actual ETH sales or redemptions. SharpLink retains its stake of 728,804 ETH and continues aggressive accumulation and DeFi-focused staking. As a non-cash accounting adjustment, the impairment has limited direct impact on ETH supply or market liquidity. While investors may be cautious about GAAP treatment of liquid staking assets, the core demand and staking dynamics of ETH remain unchanged, suggesting a neutral impact on ETH’s price in both the short and long term.