As cryptocurrencies bubble, esports are looking to take advantage.
Two companies announced initial coin offerings of cryptocurrencies on the Ethereum blockchain for esports gambling within a week of each other in June. Their developers said the burgeoning industry of professional video gaming and soaring value of virtual currencies have fed the interest for such ventures that could further develop the betting community within esports, including on competitive matches such as the new Overwatch League.
"People want to bet, and they want to bet on esports," John T. Holden, a visiting scholar at Florida State University's department of sports management, told TheStreet recently. "What we're seeing in North America is a legitimization of esports."
As an industry, esports is expected to grow 41% in 2017 to nearly $700 million in revenue and to $1.5 billion by 2020, according to video game research company NewZoo. That does not even include gambling, which is estimated to contribute billions more.
Meanwhile, Bitcoin has increased 142% in 2017 to date, and Ether, another cryptocurrency, is now worth 25 times more than it was on Jan. 1, trading now at around $210. Ether's platform allows developers to create their own virtual currencies based off its blockchain, which makes starting a virtual currency easier.
An initial coin offering, or ICO, is an unregulated way for startups to raise funds for a project, selling a percentage of the cryptocurrency to its backers in return. From March to May, the number of ICOs multiplied by six times, TechCrunch reported.