NIP Group Ventures into Bitcoin Mining, Stock Drops 17%

NIP Group, the parent company of the renowned esports organization Ninjas in Pyjamas, has ventured into Bitcoin mining. The company has acquired an unspecified number of Bitcoin mining rigs, which collectively have a hashrate of 3.11 EH/s. This computational power is used to mine Bitcoin, and NIP Group estimates that its mining operation will yield 60 BTC per month, valued at approximately $6.5 million based on current prices. However, it is important to note that the operational costs, particularly electricity, will significantly impact the net profit from this venture.

To manage its mining operations and determine the use of the acquired Bitcoin, NIP Group has established a Digital Computing Division. The company did not provide details on its plans for the mined Bitcoin. NIP Group is known for its esports team, Ninjas in Pyjamas, which competes at the highest level in various games such as Valorant, League of Legends, and Rocket League. Notably, the team's Counter-Strike: Global Offensive squad achieved an 87-win streak from 2012 to 2013, a record that remains unbroken.

Hicham Chahine, the founder and co-CEO of NIP Group, stated on LinkedIn that since the company went public last year, it has been exploring new revenue streams beyond esports and entertainment. Bitcoin mining was identified as a relevant and adjacent vertical for expansion. Chahine also hinted at further mining expansions in the future. Despite this strategic move, NIP Group's stock has decreased by 17% to $2.13 since the announcement, and it is now 88% below its all-time high of $17.76, reached in July 2024. Chahine emphasized that NIP Group is evolving into a next-generation digital infrastructure company, equipped with real computing power and operational capabilities.

This initiative by NIP Group aligns with a broader trend among public companies establishing crypto-based treasuries and reserves, inspired by the success of Strategy, formerly MicroStrategy. Led by Michael Saylor, Strategy transformed from a business intelligence software solutions company into one of the most sought-after stocks, surging over 3,300% from its initial Bitcoin purchase. The firm now holds more than $65 billion worth of Bitcoin. However, some experts have cautioned that this trend could lead to financial difficulties if companies are forced to sell their crypto holdings.