Former hedgie Mike Novogratz is betting that gamers have way too much time — and money — on their hands.
The former Fortress Investment Group bigwig has poured about $3.6 million into an online exchange that allows gamers to purchase virtual bling for their digital characters — a controversial $50 billion market that’s facilitated online gambling.
Bitcoin is doing well, despite what Dimon wants you to think
Jamie Dimon is back to trashing bitcoin
Bitcoin races past $5,000 to a new all-time high
Jamie Dimon backs off his anti-bitcoin bluster
Novogratz’s investment gives him an early stake in an initial coin offering, or ICO, for Worldwide Asset eXchange, or WAX, an online marketplace for the glitzy options, called “skins.”
Those who play “Counter-Strike: Global Offensive,” a multiplayer, first-person shooter game, can purchase skins to decorate their weapons.
The skins don’t have much function other than to change how a character or a weapon looks.
While the total market for these skins is $50 billion, according to WAX, only about 25 percent of it is tradable with other gamers, based on a rough estimate by Moritz Maurer, head of ESports at London-based Genius Sports.
The most expensive skin ever, which was used to decorate a knife in “Counter-Strike,” set one player back $120,000, said Malcolm CasSelle, WAX’s president.
The ICO functions like bitcoin. Investors pay to get a certain number of the exchange’s coins, which are the currency to purchase the skins.
WAX will issue a fixed number of 184 million coins, and their value will go up and down with the volume of the skin trading, CasSelle said.
WAX profits by charging a fee on every purchase.