Ties Between Online Gaming Stocks & Cryptocurrency
The following content is for informational purposes only. The content should not be
understood as constituting.
The Coronavirus pandemic has stirred up perhaps the most inhospitable business
environment imaginable for many industries, with gaming and hospitality assumed to bear
the brunt. Whilst hospitality hasn't stood a chance, gaming as a whole hasn't taken the
beating many all assumed it would. This is in part because online gaming has thrived under
a lockdown environment, with many people forced to turn online for entertainment.
In fact, it could be argued that demand for gaming and entertainment has risen because of
the tough, unsociable times we're in. Instead, it has been the brick and mortar casinos and
resorts that lacked diversification which are struggling.
Las Vegas Sands is an excellent example of this. NYSE: LVS was around $70 USD a share
this time last year. After the market crash in March 2020, it has failed to fully recover, sitting
around the $55 mark for several months now. In a pre-coronavirus world, its portfolio would
seem relatively diversified, with casinos, hotels, exhibition facilities, and even a science
museum in Singapore. Of course, in hindsight, these were all under immediate systemic
threat from lockdown.
With something of a surge in online casino usage, we can see stocks climb for companies
that are more digitally focused. NetEnt, a Swedish firm that is responsible for providing
gaming software for companies around the world, has seen exponential gains in its
valuation. In fact, the March market crash was the perfect catalyst for them, along with the
introduction of national social distancing measures. OTCMKTS: NTNTY went from being
around $5 for around 10 months leading up to the March crash to climbing consistently and
reaching $20.
The same goes for Stars Group, Penn National Gaming, and DraftKings. The industry as a
whole has rapidly expanded in much the same way that online content in general has. More
traditional casino companies have faced excruciatingly slow recovery, with their future's
being highly debated. The more traditional companies that have faired well, like MGM
Resorts International, have done so because of their geographical diversification in places
that are no longer in a lockdown, such as China.
Cryptocurrency: A Complimentary Good
The movement away from land-based gaming services to online has been mirrored by the
movement towards digital currency and away from fiat. They're not entirely unrelated,
however, with many online gaming sites accepting cryptocurrency as a means to speed up
transactions and remain relatively anonymous.
This deepens the existential threat for land-based casinos, which will not be able to facilitate
the level of privacy and convenience that customers have been getting used to online. The
gaming industry is only one of many factors that has increased the demand for
cryptocurrency, though.
Given the significant rise in retail investors since the pandemic's inception, we can also put it
down to speculators moving into new, emerging markets. Two years ago, Cryptocurrency
may have been seen as a very alternative investment, but with meme stocks on the rise and
high-risk speculating becoming normalized, cryptocurrency is quickly making its way into a