Theater chain AMC says it will accept Bitcoin as payment for tickets and snacks at all U.S. theaters by the end of 2021. It’s unclear how those payments would be made, as the process for actually using Bitcoin to buy goods remains clunky.
The price of Bitcoin is unpredictable — it’s not unusual for the cryptocurrency to swing 10 percent in a day. For that reason it seems assured that AMC will do like many other merchants have use an exchange to immediately convert Bitcoin to U.S. dollars at the time of transaction.
Bitcoin — Barely anyone today uses Bitcoin for everyday purchases in part because of the difficulty of doing so, and also because the price has climbed so high in just a few years that people see the “Bitcoin millionaires” and decide they need to hold onto it. Bitcoin is popular among the Reddit users who have pumped up AMC’s stock, though, and CEO Adam Aron admitted to investors that’s one motivation for the move.
Also appealing to Reddit investors, Aron said in an earning’s call that AMC could potentially team up with video game retailer GameStop. He didn’t say much about what that might entail, but a shareholder on the call suggested that AMC could use its theaters to host not just movies but also gaming competitions.
One potential pitfall of using Bitcoin is that the fees to process transactions can be high.
Visa has said it will partner with cryptocurrency exchanges so that cardholders could someday swipe plastic to pay with Bitcoin and other digital currencies, which would make them more practical and help them break out from their speculative nature. Bitcoin has some unique benefits like fast payment transfers all over the world without a bank slowing things down with slow ACH processing or paperwork. It also has drawbacks, though — your money is not insured from theft, for instance.
Pandemic oddity — Wall Street was left befuddled this year as AMC and GameStop’s stock prices skyrocketed nearly 1,000 percent despite their weak business outlooks. Both companies were struggling as a result of trends towards streaming and digital downloads, and the coronavirus pandemic only served to wallop the brick-and-mortar chains even harder. But everyday people on Reddit saw “sophisticated” investors betting against the nostalgia-inducing companies and decided to rally behind them in a sort of populist movement against Wall Street investors who make money off Main Street’s failure.
AMC and GameStop capitalized on the unusual situation by raising hundreds of millions of dollars from these new investors, with which they could actually fund new initiatives and reinvigorate themselves. It’s still a long shot, though — everyone downloads games now, so what will replace those sales? And for AMC’s part it is reckoning with a Hollywood that wants to go direct-to-consumer for new releases.