Sharplink, $500 Million in Ethereum Losses Alone...Launches On-Chain Fund with Galaxy Despite Deficit

▲ Ethereum (ETH), decline/AI-generated image

Sharplink, an Ethereum (ETH) treasury company, recorded a net loss of nearly $686 million in the first quarter. While most of the losses were attributed to unrealized losses from its Ethereum holdings, the company expanded its Ethereum management strategy by pursuing a $125 million on-chain yield fund with Galaxy Digital.

Decrypt reported on May 11 (local time) that the listed company Sharplink announced a net loss of approximately $686 million in the first quarter. Of this, about $507 million was classified as unrealized losses from the company's Ethereum treasury. In the same period last year, the net loss was less than $1 million.

Sharplink stated that despite the increased losses, its revenue significantly grew. The company's revenue increased from less than $1 million in Q1 last year to over $12 million in Q1 2026. Decrypt reported that this revenue increase stemmed from its staked Ethereum treasury.

Joseph Chalom, Sharplink's CEO, stated that generating risk-adjusted Ethereum-denominated returns through active treasury management is central to the company's strategy. He explained that during the first quarter, the company carefully deployed Ethereum capital, internalized a significant portion of its asset management platform, and moved beyond basic staking to broader on-chain opportunities.

Along with its Q1 earnings announcement, Sharplink revealed its plan to establish a $125 million on-chain yield fund with Galaxy Digital. This fund will start with a structure where $100 million is contributed from Sharplink's staked Ethereum treasury and $25 million from Galaxy. The fund aims to capture high-yield opportunities in blockchain-based financial markets.

Mike Novogratz, founder and CEO of Galaxy, stated that institutional capital is moving on-chain, and the infrastructure supporting it has matured enough to enable access to returns, liquidity, and risk management at traditional market levels. According to Decrypt, Galaxy will be responsible for protocol selection, exposure sizing, and ongoing monitoring during the on-chain deployment process.

Despite Sharplink's financial burden, market reactions were mixed. Decrypt reported that Sharplink's stock price rose by approximately 2% after the news, trading around $7.59. The company holds approximately 872,984 ETH, worth about $2.1 billion, and while its stock price has risen by about 16% in the last month, it has fallen by about 34% over the last six months.

Galaxy's stock price also rose by approximately 2.3% since the start of trading on Monday, trading around $30.92, and has increased by about 43% over the last month. At the same time, Ethereum fell by about 0.5% over the last 24 hours, hovering around $2,329. Sharplink's announcement of a large loss exposed the volatility of its Ethereum treasury strategy, but the on-chain fund with Galaxy is presented as an opportunity to expand institutional capital's yield management experiments.

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