News: NFT-related stocks gyrate wildly as digital asset buzz grows.
(Reuters) – The popularity of non-fungible tokens (NFT), a type of digital asset authenticated through blockchain, is spreading to stocks as investors focus on stocks of online art trading platforms and companies that make NFT-related announcements . trigger excessive swings in their stocks.
The excitement surrounding NFTs has exploded during the pandemic as enthusiasts spend huge sums of money on works of art and other items that only exist online, with some selling for tens of millions of dollars. This seems to have sparked interest in companies that may have a connection to the NFT world.
The shares of shipping and logistics company Sino-Global Shipping America Ltd are up more than 300% this year. The company has announced in the past few weeks that it will accept Bitcoin as a form of payment and has made other announcements related to Cryptocurrencies and Blockchain.
Sino-Global, with a market capitalization of around $ 123.4 million, announced Thursday that it will start an exchange for NFTs with the public e-commerce chain CyberMiles. Sino Global stock rose more than 33% before closing 0.4% to $ 8.54.
The shares of pipe maker ZK International Group rose 0.8% to $ 8.77 after rising as much as 20% on Thursday. ZK announced earlier this week that its subsidiary xSigma Corp will develop an NFT marketplace where users can buy and sell NFTs and create custom assets with just a few clicks. The stock is up nearly 240% this year.
Investors also bet that art companies would benefit from NFT by getting shares in art trading platforms Takung Art TKAT.K and Oriental Culture Holding in motion.
Takung’s US stock closed 33% at $ 30.06 after fluctuating widely. The stock is up 1,900% since the start of the year.
Oriental Culture stocks rose as much as 60% on Thursday before closing 4.2%. They have increased 107% since the beginning of the year.
Outside of the stock market, the trend has brought big profits for some artists and collectors.
Last month, musician and artist Grimes, Tesla CEO Elon Musk’s romantic partner, sold some animations she made on a website called Nifty Gateway for more than $ 6 million.
Earlier this month, Christie’s auctioned a $ 70 million digital-only artwork to a crypto-asset investor operating under the pseudonym “Metakovan”.
Some investors said the run in NFT-related stocks reflected a 2017 rush into the shares of companies making blockchain or cryptocurrency announcements, including Long Island Iced Tea Corp., a beverage maker whose shares rose after it announced it would make blockchain or cryptocurrency announcements. Long Blockchain Corp.
Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh, said interest in companies involved in digital assets has been “largely driven by people who think they have missed out on Bitcoin”.
“Buying the companies that offer NFT would be like buying companies that were involved with Bitcoin in the early days,” Forrest said.
But the money manager was skeptical about how well NFT would fare in the long run: “This is the electronic version of a beanie baby – do you remember that madness?”
Reporting by Sinéad Carew; Editing by Ira Iosebashvili, Dan Grebler and Leslie Adler
Original Source © Reuters