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Cypherpunk Holdings Inc. (CSE: HODL/OTC: KHRIF) has acquired 2 million ordinary shares of Animoca Brands Corporation through secondary market trades. Cypherpunk said it paid an aggregate purchase price of approximately $2.055 million Canadian dollars for the purchased shares.

Animoca Brands is an Australian company operating in the digital entertainment, blockchain and gamification sectors. It develops and publishes a broad portfolio of products including the REVV token and SAND token, plus original games including The Sandbox, Crazy Kings, and Crazy Defense Heroes.

The intersection between the gaming and NFT booms

The company has been carving itself a niche in the intriguing intersection between NFTs and the digital assets economy that lies within large video games and associated platforms.

The company has products that use popular intellectual properties including Formula 1, Marvel, WWE, Power Rangers, MotoGP, and Doraemon.

Animoca Brands’ portfolio of blockchain investments and partnerships includes Sky Mavis (Axie Infinity), Dapper Labs (CryptoKitties and NBA Top Shot), OpenSea, Harmony, Bitski, and Alien Worlds.

This transaction provides Cypherpunk with exposure to the marketplace for non-fungible tokens (NFTs) and other digital assets via its investment. Cypherpunk is listed in Canada and has set out with a mission to accumulate a diverse portfolio of digital assets, oriented around the privacy theme. Among its strategies is the acquisition of stakes in private companies which it sees as playing a role in this emerging economy.

“We are particularly interested in owning Animoca Brands given our confidence that Animoca Brands will continue to announce favourable news and developments, the possibility that it will list its shares on a public stock exchange, and due to investor sentiment and our belief in the NFT and digital entertainment sectors,” said Tony Guoga, CEO at Cypherpunk Holdings.

Animoca Brands is also based in Hong Kong and was previously listed on the ASX between the years 2015-2020. It delisted in 2020. Currently privately held, it raised US$88m on a US$1 billion valuation number in May of this year.

Animoca is backed by serious investors in gaming and blockchain

The investment round was backed by some pretty heavy weight names gaming investment market, among them the HashKey Fintech Investment Fund, the AppWorks Fund, Huobi and Octava. Animoca said the fund raising round would position it for aggressive growth.

The NFT economy looks ideal for the massive international video gaming market, as it allows players to benefit from play-to-earn and digital assets interoperability.

Play-to-earn is an evolving area of the marketplace which sees players being able to turn in-game winnings into real money. We can also see how NFTs will underpin this economy allowing easy transfer of valuable gaming assets between players, including where those assets are held in different games.

Animoca’s CEO, Yat Siu, has told gaming industry media that Animoca is in the market for acquisitions. He will also be using his war chest to make further hires (the company employs over 400 people), buying more licenses and launching new products. It already has several games that are based on the blockchain and can help to pioneer the role out of NFTs within the gaming ecosystems it already controls.

The deal makes sense for Cypherpunk, as Animoca is obviously helping to facilitate the roll out of NFTs within digital gaming and promoting their uptake. We will watch this development with great interest.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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