I've done this twice on alt accounts to test it out. Both times I sailed straight to the nearest fort to pick up a gunpowder keg. Next jump in the water to attract a shark. This can take a few minutes, but eventually a shark will arrive.
So the first time I got this I lured the shark back to the waters edge where I dropped the keg, walked back a few steps and shot the keg with my gun. Shark died, I stayed alive - and achievement popped.
Then I decided to try again on another alt account to see if you can get the achievement even if you die during the explosion. I did this by staying in the water holding the keg, and lighting the fuse (right trigger) when the shark was right next to me. Shark died, I died - and the achievement popped.
Either way, one of the more entertaining Sea of Thieves achievements.