Shares in some companies linked to non-fungible tokens (NFT)—a type of digital asset that is authenticated by blockchain—spiked higher on Monday, benefiting from their status as the latest hot trend on social media.
Shares in companies with an online art presence such as Takung Art and Oriental Culture extended gains soon after news that Twitter boss Jack Dorsey sold his first tweet – “just setting up my twttr” dated March 21, 2006 – as an NFT for just over $2.9 million on Monday.
“Its the buzz, the hot thing on Wall Street,” said Dennis Dick, head of markets structure and a proprietary trader at Bright Trading LLC in Las Vegas, who said the moves without a clear catalyst were likely due to a combination of retail traders looking at stocks mentioned in connection with NFT on social media and algorithmic traders picking up on the momentum.
“It all ends in tears probably, but right now there’s a fear of missing out (FOMO),” said Dick. “You have a combination of retail and momentum traders driving prices.”
U.S. shares of Takung, which is also listed in Frankfurt, were last up 65.1% at $49.00 with volume picking up sharply around 1330 EDT (1730 GMT). Takung, which runs an online art trading platform, has been wildly volatile recently, rising from a $2.59 close on March 10 to a high of $50.84 on Monday.
Oriental Culture, an online provider of collectibles and artwork, was last up 24.1%, with trading volume surpassing the 10-day moving average. Its shares had gyrated on Thursday last week, with companies in industries as diverse as shipping and pipe production making NFT announcements.
Other stocks tagged by social media as NFT plays were also gaining. Kuke Music Holding, a China-based classical music licensing, subscription and education service provider, rose 11.8%.
Hall of Fame Entertainment saw its shares finish up 32.2% at $5.29 on Monday, with volume more than 9 times its 10-day average.
Reporting By Sinéad Carew and Chuck Mikolajczak; editing by Richard Pullinl; Reuters