3 NFT Stocks Benefitting from the Digital Asset Buzz
Similar to how stocks that are related to cryptocurrency, cannabis, and electric vehicles rallied on heavy volume a few months back, we are witnessing new speculative trading activity in companies that are involved in the non-fungible token (NFT) space.
Similar to how stocks that are related to cryptocurrency, cannabis, and electric vehicles rallied on heavy volume a few months back, we are witnessing new speculative trading activity in companies that are involved in the non-fungible token (NFT) space. If you aren’t familiar with NFTs, they are units of data that are supported on a digital ledger called a blockchain. NFTs can pretty much be anything digital, including art, videos, music, video game items, and even tweets.
Supply and demand are the key drivers for the price of NFTs, and it’s quite evident that there is a high demand from collectors, investors, and other individuals. Some NFTs have sold for millions of dollars, including an art piece titled “Everydays: The First 5000 Days,” by crypto-artist Beeple, which was sold for a whopping $69 million. Since investors are speculating on the future potential of companies that are involved or could be involved in NFTs at this time, there have been some wild moves in the price of their stocks.
While you might be skeptical about NFTs and their future, it doesn’t hurt to familiarize yourself with some of the stocks that are benefitting from the digital asset buzz. Let’s take a look at 3 NFT-related stocks that are benefitting from the widespread interest in this burgeoning industry.
WiSeKey International Holdings (NASDAQ: WKEY)
With WiSeKey International Holdings, you have the perfect example of a company that is generating hype from the current NFT craze. WiSeKey is a global cybersecurity company that offers secure communications solutions for people and objects using technology like blockchain, AI, and IoT. The stock has been catapulting higher this week and rallied over 100% during Wednesday’s trading session thanks to news that the company would be launching WiSe.ART, a type of technology that provides a digital certificate of authenticity for NFTs. Since digital artwork and files can theoretically be copied an infinite number of times, something that can help to authenticate and provide proof of buyer’s ownership could prove to be very valuable.
Takung Art (NYSEAMERICAN:TKAT)
Another company that is benefitting from the rise of NFTs is Takung Art, which is a Hong-Kong-based company that provides an online art trading platform. The company’s digital art marketplace doesn’t support NFTs, nor has the company openly announced that it will be dealing in NFTs. That means the recent boost in the stock price is pure speculation. Investors and traders should be very careful if they plan to buy Takung Art, given its volatility and the fact that the price has rallied over 1000% in March.
Dolphin Entertainment Inc (NASDAQ:DLPN)
This NFT-related stock has rallied over 289% in March thus far and has seen massive spikes in volume this week. Dolphin Entertainment is an entertainment marketing and production company that provides strategic marketing and publicity services to various brands. The big news that sent shares soaring this week was the announcement that the company has formed a new division that will be dedicated to designing, producing, releasing, and promoting NFTs for itself and clients within the company. Dolphin is also partnering up with Hall of Fame Entertainment Resort (NASDAQ:HOFV) to offer non-fungible tokens that will allow fans of professional football and sports to buy and sell exclusive sports-related NFTs. It’s easy to recognize the profit potential for a company that combines sports and NFTs, given the existing market for sports collectibles.
Most of these companies have seen their market capitalization increase exponentially thanks to the massive enthusiasm for NFTs. That’s why investors and traders should be extremely careful about adding positions of these NFT-related stocks given the potential for volatile price swings in the coming weeks. Keep in mind that many of these companies are unprofitable and could be coming down just as quickly as they rallied up.
With that said, it seems that NFTs are here to stay, and there will undoubtedly be some winners to come out of the rise of this new industry. Given that the NFT space is still in its infancy and is shaking up the art world, keeping an eye on the companies mentioned above might not be a bad idea. Just remember that these stocks are not for risk-averse investors.
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