Blockchain Stocks get Midas touch.
It’s become somewhat of a market cliché that when a firm goes near something blockchain related – or is even rumoured to – its stock suddenly shoots up. It’s not uncommon for its stock to rise before it even enters the field. Riot Blockchain Inc., formerly Bioptix Inc. is just one of the latest, notable examples.
Blockchain Stocks
Previously a manufacturer of biotech diagnostic machinery (and previously a penny stock), Riot Blockchain Inc. has changed their focus to investing in cryptocurrency-linked businesses, causing their stock to double since mid-November when it purchased a minority stake in Verady LLC, an accounting and auditing company.
It added gains off the back of rebranding and acquiring a stake in October in Tess Inc., the blockchain-based payment provider. Meanwhile, bitcoin, the king of cryptocurrency, has held stable at approximately $8100 this past week.
Bitcoin Boom
This market reaction reveals significant interest from investors for exposure to 2017’s cryptocurrency rally, seeing bitcoin soar by over 700 percent and a rush of new digital tokens arise, with the cryptocurrency market increasing rapidly to $260 billion in market capitalisation up from a mere $17 billion at the beginning of the year.
Derivatives of bitcoin are yet to begin trading on any major exchange – exchange-traded funds have yet to be approved and there is only a small amount of notes and trusts that hold digital assets. This leads investors who want a piece of the blockchain boom yet are cautious of acquiring cryptocurrencies directly, to look to blockchain-linked stocks.
Focus Shift To Blockchain
Private equity 360 Blockchain Inc. (previously 360 Capital Financial) is another example to study. The firm rebranded in October and released its plans for a blockchain-linked focus for its investments. This drove its stock up by over 300 percent.
The list continues with Overstock.com Inc.’s share price soaring following the announcement of their launch of a Securities and Exchange Commission-compliant digital tokens exchange. And Goldmoney Inc. says their shares jumped after announcing their intention to provide clients with the capacity to trade ether and bitcoin, with the ability to hold the assets in insured and auditable vaults.
It would seem that blockchain is the darling of investors at the moment. Is it an old-fashioned gold rush or the new horizon? All that’s for sure is that investors will continue to closely watch the new technology’s impact on the market.