Mega Matrix's $2B Bet on Ethena (ENA) Raises Eyebrows
Mega Matrix Plans $2B Digital Asset Treasury Focused on Ethena
NYSE-listed Mega Matrix (MPU) has filed a $2 billion shelf registration, signaling a major strategic shift towards digital assets. The company intends to establish a digital asset treasury primarily focused on Ethena (ENA), the governance token of the Ethena stablecoin protocol.
According to the filing with the Securities and Exchange Commission (SEC), Mega Matrix aims to raise up to $2 billion through the sale of securities. The proceeds will be used to accumulate crypto assets, with a specific emphasis on ENA.
Following the announcement, Mega Matrix's stock initially dipped by as much as 6% before partially recovering. The stock remains down nearly 30% since the company first announced its crypto pivot on August 25.
Strategic Focus on Stablecoin Governance
Mega Matrix intends to be the first publicly traded company to center its digital asset treasury on stablecoin governance through accumulating Ethena’s ENA token.
Ethena is the DeFi protocol behind the USDe "digital dollar," which is designed to maintain a $1 peg and generate yield by holding spot cryptocurrencies and shorting an equal amount of derivatives. ENA holders could potentially benefit from protocol revenues once the governance mechanism is activated.
A newly formed company named StablecoinX announced similar plans in July to establish an ENA treasury through a SPAC merger.
Digital Asset Treasury Trend: A Risky Strategy?
The trend of digital asset treasury (DAT) firms amassing cryptocurrencies has gained traction, with companies raising funds on traditional capital markets to acquire digital assets. MicroStrategy (MSTR) notably pioneered this approach by becoming the largest corporate holder of Bitcoin. However, some worry that DAT firms may take on more risk than they realize.
However, there are signs that the trend may be cooling, as many companies in this sector have seen significant declines in their stock prices recently.
Implications for the Crypto Market
Mega Matrix's ambitious plan to establish a $2 billion ENA-focused treasury could significantly impact the Ethena ecosystem. Whether this investment will be successful remains to be seen, especially considering the volatility inherent in the crypto market.