PLBY Group has suffered a loss $4.9 Million due to the steep declines in cryptocurrency prices. The Rabbitars NFTs that the company owned were sold to Ethereum. This has caused a significant loss in its value.
Playboy’s NFT line was launched in 2021. The tokens were paid for with Ethereum. The price of Ethereum coins plunged, leading to huge losses for Playboy Media.
According to Playboy, the digital assets of Playboy, which were valued at $1.75million at September 2022’s end, have dropped to $327,000. The company’s crypto winter has had a significant impact on its decentralized currency portfolio.
Playboy’s worst mistake is that it considers its digital assets “indefinite-lived, intangible assets” and cannot recover these impairment losses even if they go up again.
The company noted that Ethereum coins’ prices fluctuated a lot in 2022. The coins’ price fluctuated through turbulent periods, with the lowest being $964. The carrying value of each token that the group had at the end the reporting period shows the lowest price one Ethereum has seen since receipt.
Negative swings in Ethereum’s market price could have an impact on the company’s earnings and carrying values. However, a positive impact of a rise in Ethereum’s prices is only when Ethereum in the balance sheet are sold at gain.
Playboy’s Passion for Blockchain did not pay off
Playboy’s Rabbitar NFTs (Playboy’s Rabbitar NFTs) were launched in October 2021, when cryptocurrency was still a hot topic. Playboy was keen to explore new monetization options as few people could have predicted the current state in the crypto market.
Playboy was not the first to venture into blockchain technology with the Rabbitar line. It had already launched the Liquid Summer collection that year. The Liquid Summer collection was created in collaboration by Slimesunday. It featured photos of Lenna, a well-known Playboy model.
Playboy was already interested in cryptospace long before it produced the Liquid Summer collection. Playboy TV allowed customers to pay for Playboy TV using Bitcoin in 2018. Playboy eventually made it possible for customers to pay with Bitcoin on Playboy.com.
Playboy is now facing significant losses despite its genuine interest in crypto.