Business

NFT-related stocks draw attention as digital asset buzz grows

By Sinéad Carew

(Reuters) – The popularity of non-fungible tokens, a type of digital asset that is authenticated by blockchain, is spreading to equities as investors focus on shares of online art trading platforms and companies making NFT-related announcements, sparking outsize moves in their stocks.

Shares of Sino-Global Shipping America Ltd., a shipping and logistics company, were last up 12% after rising as much as 33% after the company said it will launch an exchange for NFTs with e-commerce public chain CyberMiles. The stock, which recently traded at $9.66, rose 85% in the last eight sessions.

Shares of pipe maker ZK International Group, last up 6%, rose as much as 20% before paring gains on Thursday after it said subsidiary xSigma Corporation would develop an NFT marketplace where users could buy and sell NFTs and create their own custom assets in a few clicks.

Investors also appeared to be betting that art-related companies would profit from NFT, with U.S. shares in art trading platforms Takung Art Oriental Culture Holding changing hands rapidly on Thursday.

Takung shares – last down 8% after rising as much as 79% earlier in the session – had soared more than 700% in the last five sessions. Oriental Culture’s shares, which rose as much as 60% on Thursday before turning down 3%, had risen 200% in the last five sessions.

The popularity of NFTs has exploded during the pandemic, as enthusiasts and investors scramble to spend enormous sums of money on items that exist only online.

Last month, musician and artist Grimes, who is dating Tesla Chief Executive Officer Elon Musk, sold some animations she made on a website called Nifty Gateway for more than $6 million.

Earlier this month, a $70 million digital-only artwork was auctioned by Christie’s to a crypto asset investor who goes by the pseudonym “Metakovan.”

Some investors said the rush into NFTs echoes a 2017 rush https://www.reuters.com/article/uk-stocks-cryptocurrency-analysis/cryptocurrency-stocks-holding-gains-despite-bitcoin-pullback-idUSKBN1EG24P into the stocks of companies making blockchain or cryptocurrency announcements, including Long Island Iced Tea Corp, a beverage maker whose shares soared after the company said it would rebrand itself Long Blockchain Corp.

Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh, said the interest in companies involved in digital assets is “largely driven by the people that think they missed bitcoin.”

“Buying the companies offering NFT would be like buying companies that have some sort of dealings with bitcoin in the early days,” Forrest said.

But, the money manager was skeptical about how well NFT would fare in the long run, saying “This is the electronic version of a Beanie Baby – remember that craze?”

Trading volume in Culture was 4.4 times its 10-day moving average, while Takung was 3.7 times its 10-day moving average.

(Reporting By Sinéad Carew; Editing by Ira Iosebashvili and Dan Grebler)

Read the original article on Business Insider

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