Skyrocketing Stock Prices for Esports Company Following Investment in Bitcoin and Ethereum
In a significant move, Allied Gaming & Entertainment, a Nasdaq-listed esports and gaming company, has announced a strategic investment in Bitcoin and Ethereum as part of a new treasury management strategy. This decision has sent waves through the cryptocurrency market, giving the company a much-needed boost.
The stock of Allied Gaming & Entertainment, traded under the ticker AGAE, soared 105% to $1.87 earlier Friday and has since dipped to $1.65, still up 71% on the day. This move comes after a gradual downward grind that the company has been experiencing since its initial public offering in 2017.
Allied Gaming & Entertainment's foray into cryptocurrency follows a similar path taken by MicroStrategy, whose company (now Strategy) has pivoted to focus on acquiring Bitcoin. Michael Saylor, the CEO of MicroStrategy, has suggested that his company could acquire up to 7% of the total Bitcoin supply. As of now, MicroStrategy holds 638,460 BTC, worth approximately $73.6 billion.
The trend of publicly traded companies investing in cryptocurrencies has raised concerns about a potential black swan event in the crypto market. The FTX collapse is cited as a past example of such an event. However, some industry leaders, like SharpLink Gaming's co-CEO, Joseph Chalom, believe that the Ethereum treasury push will be a positive "white swan" event, educating institutional investors about cryptocurrency.
Allied Gaming & Entertainment is not alone in its cryptocurrency investments. SharpLink Gaming and BitMine Immersion Technologies, leading Ethereum treasury companies, hold 2.4% of the Ethereum supply between them. Other crypto treasury companies include those for Dogecoin, Solana, XRP, Sui, and other altcoins.
Allied Gaming & Entertainment, which owns and operates the HyperX Esports Arena, a 650-person capacity venue in Las Vegas, has also teased real-world asset initiatives as part of its broader embrace of blockchain technology. The company's investment in Bitcoin and Ethereum marks a significant step in this direction.
The exact figures of Allied Gaming & Entertainment's Bitcoin and Ethereum investment, as well as its holdings in these cryptocurrencies, have not been disclosed. Similarly, Allied Gaming & Entertainment's competitor, Allied Esports Entertainment Inc., has not revealed the specifics of its cryptocurrency investments.
The HyperX Esports Arena has hosted several high-profile events, including the 2019 League of Legends All-Stars match. As Allied Gaming & Entertainment continues to navigate the world of cryptocurrency, it remains to be seen how this move will impact its operations and the broader esports and gaming industry.
