Everyone’s favorite non-GameStop meme stock, AMC Theaters, is crossing the streams in the world of Reddit-fueled investing. Back in August, AMC CEO Adam Aron announced during an earnings call that the theater chain would begin accepting Bitcoin as payment for tickets on the company’s website.
The move coincided with an earnings report for AMC that actually wasn’t terrible. Many analysts have pointed out that AMC’s stock was one of the few popular “meme stocks” that was undervalued, as the company was always bound to bounce back from their extremely slow 2020 and a rocky first half of 2021.
AMC seems to be capitalizing on the amateur investor buzz around both its own stock and around cryptocurrency. While regulators have serious reservations about crypto, some businesses have embraced the novel digital currency as a way to broaden their payment varieties and to increase their margins.
AMC CEO Announces More Crypto Payment
On Wednesday, Aron took to Twitter to confirm rumors that AMC would soon be accepting even more cryptocurrency standards as payment. The company will add Litecoin, Ether, and Bitcoin Cash (which is essentially just an alternative Bitcoin) to its accepted payment types. The news was great for Litecoin, which is trading up several percentage points on Thursday, bringing it to nearly $190 per coin.
Litecoin needed a win, too. A hoax on Monday alleged that Walmart would begin accepting Litecoin as payment soon, which briefly shot Litecoin’s value through the roof before investors realized they’d been duped. Whoever was responsible likely sold their Litecoin during the short-lived rally, making a tidy sum.
Ether has been having a great time thanks to the news, meanwhile. It’s up about six percent going into Thursday, trading around $3,600 per coin. Ether is easily the second most popular cryptocurrency behind Bitcoin, and it’s been enjoying a banner year thanks to great investor sentiment and the promise that it will be switching to a more sustainable “proof of work” method of generating new coins.
A New Trend?
Companies accepting crypto is the newest trend that enthusiasts have looked to for evidence of the future stability of their investments. Back in April, American automaker Tesla briefly started accepting Bitcoin as payment for its cars. The company reversed course on this roughly a month later, causing a downturn for the standard.
Tesla CEO Elon Musk has since suggested the company could return to accepting Bitcoin if the standard can switch away from a “proof of work” model. Proof of work models sees computers expending considerable amounts of real-world energy to create Bitcoins and verify their transactions.
Amazon has also hinted at the possibility that it could begin accepting Bitcoin as payment on its website. Should this come to pass, Bitcoin would almost assuredly see a massive rally in its price, as this could open up a compelling use case for the standard.
Use Case for Crypto
Crypto faces an uphill battle in making itself a popular and widely accepted standard. For one thing, cryptocurrency is very new, and many people in the general public eye it warily. Stories of fraud, theft and criminal activity relating to the use of crypto have given Bitcoin and other currencies a bad reputation.
Adding to this, the aforementioned environmental impact of proof-of-work models keeps many people from fully embracing cryptocurrencies that implement it. Regulators have been swirling around crypto lately, suggesting that sweeping changes could be on the way for the laws surrounding the exchange of cryptocurrency.
Enthusiasts largely agree that the main thing crypto needs to increase its value and general acceptance is a more universal use case. Right now, what can you actually do with Bitcoin you purchase? You can sell it to other enthusiasts, hopefully for a profit. You can use it in personal exchanges, assuming the other party is comfortable accepting Bitcoin as recompense.
However, if you want to buy a new electronic device from Amazon or a movie ticket to an AMC theater, you currently can’t do that. If this were to change, if cryptocurrency were to actually become currency, it could have a stabilizing effect on the standard.
AMC Doubling Down
AMC fully embracing crypto and deciding to accept the standard as payment shows that the company is doubling down on the amateur investor sentiment that has driven its stock price to new heights. The company could stand to gain significant value from accepting crypto, should the currency it takes increase in value dramatically after the sale.
Bitcoin and Ether have been known to fluctuate wildly in price over a short time, after all. However, AMC could be left in a dire financial position should it begin accepting crypto just as the standard falls to new lows. With the specter of regulation looming, it’s tough for analysts to say what the future looks like for digital currency.