Following the footsteps of SharpLink Gaming (NASDAQ: SBET), Nasdaq-listed GameSquare also announced its $100 million Ethereum treasury strategy on July 8, leading to a 58% rally in its stock price. ETH as a Treasury vehicle is gaining much prominence these days amid strong institutional demand, ETF inflows, and overall growth of the ecosystem. On Tuesday, the GAME stock closed at $1.54, while gaining an additional 7% in after-market hours.
GameSquare Stock Rallies on Ethereum Treasury Plans
As soon as the Minneapolis-based digital media firm announced its ETH Treasury plans on July 8, the GameSquare share price gained 58%, amid strong buying activity. The announcement came as the largest corporate holder of ETH, SharpLink Gaming (NASDAQ: SBET), expanded its portfolio with an additional $19.2 million worth of ETH purchases.
On Tuesday, GameSquare announced the pricing of an underwritten public offering of 8,421,054 shares of its common stock at $0.95 per share. The offering is expected to raise approximately $8.0 million in gross proceeds, before deducting underwriting discounts, commissions, and other offering expenses.
The company announced that the proceeds of the same would go towards executing its $100 million Ethereum treasury strategy by partnering with Dialectic, a crypto-native capital management firm. Speaking on the development, Justin Kenna, CEO of GameSquare stated:
“We’ve partnered with one of the world’s top crypto investment firms to generate real, on-chain yield while deepening our expertise in decentralized finance, pursuing new revenue streams, and strengthening our balance sheet. This new treasury management strategy enhances our financial flexibility and allows us to support a defined capital allocation plan that is focused on pursuing additional ETH asset purchases”.
To execute its Ethereum treasury strategy, the firm will leverage Dialectic’s proprietary Medici platform, which taps into machine learning, advanced risk controls, and automated optimization in order to deliver superior risk-adjusted returns. With targeted yields ranging from 8% to 14%, the strategy aims to outperform traditional ETH staking benchmarks, which currently offer 3-4% yields.
Institutional Race to ETH Holdings Spark
The institutional race to Ethereum stacking has begun, led by SharpLink Gaming, which seeks to become the MicroStrategy of ETH holdings. The company has already added 205,634 ETH to its holdings so far. What attracts institutions to build an ETH treasury is its additional yield-generating feature through staking.
In a major development, Nasdaq-listed Bit Digital recently flipped to Ethereum staking by dumping its entire Bitcoin holdings. With mining costs on the rise, the company is positioning itself to generate better yields through ETH staking.
On the other hand, institutional purchases with Ethereum ETF inflows have also been on the rise over the past month. BlackRock iShares Ethereum Trust (ETHA) has been leading most of the inflows during the time and now holds 1.826 million ETH in its kitty.
With rising corporate and institutional participation, Ethereum’s demand as a long-term asset class is rising. This would lead to a crucial base formation and a sustained ETH price rally moving ahead. Currently, ETH has been forming a base at $2,500, with investors looking for the next major breakout to $3,000 and beyond.
Bhushan Akolkar
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets.
He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills.
Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
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Source: https://coingape.com/gamesquare-stock-shoots-58-after-revealing-100-million-ethereum-treasury-strategy/