CRYPTO 101 Ep. 697 — Ethereum's Outlook for 2026

With SharpLink's CIO Matt Sheffield
Hosts: Bryce Paul & Brendan Viehman
Date: December 30, 2025

Episode Overview

This episode features Matt Sheffield, CIO at SharpLink Gaming, for a deep dive into Ethereum’s future as an institutional asset, the evolution of productive crypto treasuries, and how traditional finance is warming to the Ethereum ecosystem. Sheffield, with a notable Wall Street and digital asset pedigree, provides practical insight into the macro landscape, trading strategies, MSCI’s index exclusion proposal, and the next era of Ethereum – including tokenized assets and ongoing protocol upgrades.

Guest Introduction & Background

[04:53] Matt Sheffield shares his journey:

• Entered crypto “by accident” in 2011; started mining Bitcoin out of curiosity and fascination.
• Early perspective: “Did not foresee Bitcoin and then eventually Ethereum becoming a risk asset, nor an asset class at the time.” (Matt Sheffield, 05:04)
• Started career in fixed income trading at Bridgewater Associates. Crypto trading was a “side discussion” among interested employees.
• By 2022, crypto had become mainstream on trading desks, coinciding with events like the Luna trade and wider macro risk analysis in digital assets.
• Launched a medium-volatility crypto hedge fund in 2022 (just 10 days before the FTX collapse): “Probably subpar timing on that front.” (08:02)
• Transitioned to trading at FalconX, then ultimately joined SharpLink after initially trying to bring them on as a client.

Trading & Market Wisdom

Building a Systematic, Repeatable Approach

[10:58] Matt’s trading philosophy:

• Emphasizes structured process: “I like to have an if-then statement of why I think something is happening and then what should happen, and test that understanding through time.” (10:58)
• Importance of codifying insights beyond gut instinct, allowing continuous improvement and a repeatable ruleset.
• Key lesson for new traders: Backtest intuitions, look for consistency, and build an “economic machine.”

Macro Outlook and Crypto’s Role in Portfolios

Macro Environment – Where Are We Now?

[12:57] Matt’s take:

• Crypto fits in the "longer tail risk asset bucket" for most, still early in adoption.
• “Through time, as there’s more utility and more institutional adoption, I think this concept of crypto as an investment class probably fades away into it’s just another asset class." (13:37)
• Near-term: Highly correlated to liquidity; forward outlook is “pretty constructive for a risk asset.”

Recent Market Events: Navigating Uncertainty

Understanding the 10/10 Liquidation Event

[15:13] Matt contextualizes recent turmoil:

• 10/10 marked “the largest single day deleveraging loss of wealth crypto has ever seen” — ~$19 billion in liquidations.
• Draws comparison to FTX’s collapse: “It took two to three months before the market was really able to re-position itself, de-lever, and then start to heal.” (15:32)
• Bearish consensus often marks cycle bottoms; pain coincides with the next leg up.
• Quote: “Everyone can’t win at the same time in crypto trading; that’s just not how it works.” (16:29)

SharpLink’s Strategy: Institutional-Grade, Productive ETH Treasury

Productive Treasury vs. Buy-and-Hold

[17:58] Matt explains SharpLink’s ethos:

• Goal: “Building the most productive ETH treasury in the market.” (17:58)
• Distinction: Bitcoin is a store of value, but Ethereum can be productive via staking and DeFi.
• “If you want to be bullish on ETH, what’s the best way to express it?... Let’s make this a productive asset.” (18:35)
• SharpLink prioritizes security, uses institutional custodians, and seeks to optimize returns for ETH holders.

DeFi Applications & Yield Generation

[19:58] Treasury allocation strategy:

• “To date, it’s been DeFi. We are 98% staked to start, and that was really important to us. You’re earning roughly the 2.85% staking rate.” (19:58)
• Developed custom LRTs (liquid restaking tokens) and leverages "permanent capital" to provide long-term, stable TVL to protocols in return for term premiums.
• Focus on being a "benevolent capitalist" in Ethereum, demonstrating best practices for productive capital.

KPIs and Shareholder Value

[23:17] Performance metrics:

• “It’s ETH per share. Ultimately, that is what our investors are entrusting us to do... generate additional ETH on ETH returns in a safe way through time.” (23:17)
• Risk-aware, stewardship approach rather than chasing outlier returns.

Institutional Competition and Coopetition

[24:29] Matt on other ETH treasuries:

• Sees the landscape as “coopetition”: “At the end of the day, we are all here to explain to people how Ethereum can be more productive.” (24:29)
• Differentiates between treasuries with various investment and operational strategies.
• Value in diversity, education, and outreach to broaden Ethereum’s appeal.

Institutional Inroads: TradFi’s Embrace of Ethereum

[25:50] Hosts highlight recent developments:

• JP Morgan, Fidelity, BlackRock, Merrill Lynch, Morgan Stanley all now engaging with Ethereum-based products or giving allocations to crypto ETFs.
• Matt: Growing interest from institutional allocators globally, but education remains a hurdle. “A lot of it’s still education. I think we see it as an industry.” (27:56)
• Team at SharpLink includes alumni from BlackRock, Bain Crypto; aims to be the bridge between TradFi and crypto.

Regulatory Friction: MSCI Index Exclusion Proposal

The Inclusion/Exclusion Debate

[29:57] Host introduces MSCI’s proposal:

• MSCI suggests excluding companies with >50% crypto on their balance sheet from major indexes.

[29:57] Matt’s response:

• “I was a bit taken aback. I thought we were past this, honestly, as an industry.” (29:57)
• Argues that blanket exclusion creates arbitrary corner cases, reduces investor exposure, and undermines market cap-weighted indexes and the democratizing goal of crypto.
• Highlights retail investor disadvantage: “You’re effectively just excluding a large portion of the investment world without their knowledge. And I don't love that.” (31:21)
• Points out that staked ETH on treasury balance sheets actively secures the network: “This is a vital service which is securing the network and we’re earning revenues via staking… It becomes a bit confusing, like why is fiat any better to hold on your balance sheet in that sense?” (35:09)

The Next DeFi Frontier: Tokenization & On-Chain Equities

[37:52] Matt’s excitement:

• Sees tokenized RWAs (real world assets) and equities as transformational — “the zero to 60 moment that happens very suddenly.”
• Stablecoins are just the start; equity tokenization will unlock massive utility and capital efficiency, especially for retail.
• “Liquidity begets liquidity… Once we go from that zero to 60, it’s going to be all bets off. The best way to hold your equity will be in tokenized form.” (39:00)

[40:36] Matt on BlackRock’s ambitions:

• “Larry Fink [BlackRock CEO] on the most recent earnings call, ‘We’re going to tokenize all of our products.’… That would just 12x what is currently tokenized.” (40:36)
• Predicts stepwise jumps in on-chain TVL as institutional products move over.

Valuation: How to Value Ethereum in a Tokenized World

[41:50] Matt’s approach:

• Market value of Ethereum should reflect the value of assets secured: “For every $2 of high quality DeFi, there’s roughly $1 of Ethereum market cap.” (41:58)
• Not perfectly linear; expects a significant, J-shaped catch up as tokenization ramps.
• “Ethereum has the license to win… pretty close to reaching a point of no return for the tokenized asset space.” (42:48)

Ethereum vs. Private Chains and Solana: Why ETH Wins (for Now)

[43:20] Composability and Network Effects:

• “It’s about the composability and the marginal utility.” (43:31)
• Network liquidity and utility drive value; public chains will outcompete private chains for most tokenization needs.

[45:05] ETH vs. Solana for Tokenization:

• Ethereum focused on security/cryptography first, throughput second: “They have enabled the layer 2 ecosystem to let others do that portion of it in the interim.” (45:08)
• “Ethereum was very clever in kind of an Uber-esque way where they said, we’re going to just ensure that everyone has this on their phone… maximize the network effect and then eventually… work on the economics later.” (46:18)
• Solana praised for specific use cases like meme trading or fast micropayments, but not seen as the go-to for institutional-scale tokenization.

The Future: Upgrades, Throughput, and Sharplink’s Role

[47:35] Matt’s outlook on Ethereum upgrades:

• “I definitely think the throughput related upgrades are exciting to me. So like I’m looking closely at things like Lean... prioritizing the user experience for retail side of things.” (47:35)
• Supports the L2 ecosystem and approach: “I would rather them continue to build super high quality upgrades, do so in a timely way… allow people that are able to solve particular use cases to do so on the L2s and be supportive of the L2s.” (48:02)

On Sharplink’s Mission and Education:

• Focused on redefining treasuries, broadening education and transparency.
• “The SharpLink brand… is associated with being that link between traditional finance and the on-chain economy and doing so in an intelligent way, in an institutional grade way.” (49:36)

Notable Quotes & Timestamps

• “I did not foresee Bitcoin and then eventually Ethereum becoming a risk asset, nor an asset class at the time.”
  — Matt Sheffield [04:53]
• “Everyone can’t win at the same time in crypto trading; that’s just not how it works. It has to be a bit of a non-consensus view if you’re going to see it play out.”
  — Matt Sheffield [16:29]
• “If you want to be bullish on ETH, what’s the best way to express it?... Let’s make this a productive asset.”
  — Matt Sheffield [18:35]
• “You’re earning roughly the 2.85% staking rate. The next thing we did was... a custom LRT... committed 200 million for two years.”
  — Matt Sheffield [19:58]
• “It’s ETH per share. Ultimately, that is what our investors are entrusting us to do.”
  — Matt Sheffield [23:17]
• “I was a bit taken aback. I thought we were past this, honestly, as an industry [about MSCI’s proposal].”
  — Matt Sheffield [29:57]
• “The best way to hold your equity will be in tokenized form because you’ll be leaving a lot of juice on the table by not having it there.”
  — Matt Sheffield [39:00]
• “Ethereum has the license to win. ... It would be very difficult for any other person to take it out of its incumbency for the tokenized asset space.”
  — Matt Sheffield [42:48]
• “Ethereum did the hardest part first, which is focus on cryptography and security. Now they’re working on transaction throughput.”
  — Matt Sheffield [45:05]

Key Timestamps

• [04:53] — Matt’s crypto origin story and institutional experience
• [10:58] — Trading strategy & systematic approaches
• [12:57] — Macro environment overview and crypto’s present role
• [15:13] — October 10th liquidation event’s impact and recovery
• [17:58] — SharpLink’s ETH treasury strategy: productivity, staking, DeFi
• [19:58] — Concrete treasury management strategies (LRTs, term premiums)
• [23:17] — KPIs and ETH per share as the core metric
• [25:50] — Institutional adoption: JP Morgan, BlackRock, Fidelity, and more
• [29:57] — MSCI index exclusion debate
• [37:52] — The coming wave of tokenized RWAs and equities
• [40:36] — BlackRock’s tokenization agenda
• [41:50] — Valuing Ethereum in a tokenized future
• [43:20] — Public vs. private chains; composability
• [45:05] — ETH vs. Solana for institutional tokenization
• [47:35] — Exciting Ethereum upgrades on the horizon
• [49:36] — Sharplink’s mission, education, bridging TradFi and DeFi

Further Resources

• Matt Sheffield on X: @SheffieldReport
• SharpLink’s live ETH treasury dashboard: sharplink.com

In summary:
This episode delivers a candid, insider perspective on the institutionalization and future growth of Ethereum — from productive treasuries and on-chain assets to the regulatory and competitive landscape. Matt Sheffield urges a data-driven, repeatable approach to trading, embraces competition as education, and highlights the importance of bridging legacy finance with crypto-native protocols as Ethereum’s tokenized era accelerates.