AMC Theatres will accept the cryptocurrency bitcoin for movie tickets and concessions in the U.S. by the end of 2021, according to CEO Adam Aron, who first made the announcement during an earnings call on Monday. The theatre chain will also start accepting Apple Pay and Google Pay, but there are still plenty of important questions about AMC’s bitcoin bet that haven’t yet been answered.
“I’ve had to learn more in the past six months about blockchain and cryptocurrency than I learned about it in the entire decade before that,” Aron told members of the conference call.
“This increased knowledge has given me the confidence to tell you all today that AMC is hereby formally announcing on this call that by year’s end we will have the information technology systems in place to accept bitcoin,” Aron continued.
Aron noted that all bitcoin purchases of movie tickets and concessions would need to happen online, leaving some question about whether customers would be able to change their purchases after they showed up to the theatre. But there’s an even bigger question that Aron didn’t address on the call: Bitcoin’s high transaction costs, which make it infamously bad as a currency.
Who will wind up paying the transaction fees every time an AMC customer wants to buy a $US10 ($14) bag of popcorn? The average bitcoin transaction fee is currently running at roughly $US2.50 ($3), meaning you’re going to be paying $US12.50 ($17) if you want to use bitcoin. It seems unlikely AMC will eat that cost, probably passing it on to the consumer.
Bitcoin transaction fees are also extremely volatile, much like the price of bitcoin itself. As recently as April, bitcoin transaction fees were over $US62 ($85) per transaction, something that could very well happen again. If transaction fees skyrocket, your $US10 ($14) bag of popcorn suddenly costs $US72 ($98) in fiat currency.
Aron said on the call that he learned about cryptocurrency while serving on the board of Centricus Acquisition Corp. and AMC’s interest in bitcoin is likely being driven by retail investors from Reddit’s WallStreetBets, which is behind the so-called “meme stock” craze. AMC became a meme stock along with GameStop after users on WallStreetBets set out to squeeze short-sellers on Wall Street who were targeting what the redditors saw as a beloved institution from their childhoods.
AMC’s stock is currently priced at $US33.80 ($46) up 3.36% over the past 24 hours and up an astonishing 1,494% on the year, all thanks to the meme stock craze.
AMC obviously isn’t the first company to experiment with cryptocurrencies. Electric car maker Tesla started accepting bitcoin in late March, but stopped less than two months later. Tesla CEO Elon Musk insisted the company stopped taking bitcoin because he was concerned about the environmental impact of mining cryptocurrency, a process that requires a tremendous amount of energy. But Musk said just last month he’s open to accepting bitcoin again in the future.
The energy consumption of bitcoin hasn’t drastically changed in 2021, so many interpret Musk’s flip flopping merely as an attempt to manipulate bitcoin’s price, a charge the billionaire strongly denies.
A recent job posting for Amazon hinted at the online retail giant’s interest in cryptocurrencies, but the company has denied that it’s planning to accept bitcoin in the near future. London’s City A.M. news outlet reported in July that Amazon was planning to accept bitcoin by the end of 2021 and might even develop its own coin by 2022, but Amazon says that’s not true.
“Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true. We remain focused on exploring what this could look like for customers shopping on Amazon,” an Amazon spokesperson told Gizmodo.
Bitcoin is currently trading at $US45,936 ($62,625), up 5.1% over the past 24 hours. The crypto has been heading north over the past few weeks after dipping below $US30,000 ($40,899) in July, but it’s still substantially lower than its all-time-high of $US63,729 ($86,882) back in April.
Bitcoin is volatile, to say the least, one of the main reasons it makes for a terrible currency. But if people want to pay in crypto, large companies will be happy to oblige. These corporations just need to figure out how to offload their holdings when the price is high, and you can bet someone is working on that right now.