Are NFT Penny Stocks a Thing Now?
There’s no denying that 2021 was a crazy year for penny stocks. While these companies are basically in the basement of the stock market, that hasn’t stopped traders from sifting through hundreds of names to identify a time with potential. Last year it was companies related to Corona. Whether it was tests, vaccines, or even paper products, there has been speculation about every benefit of the pandemic.
Later in the year we saw that attention turned to alternative energy stocks. Even companies that hadn’t released any news in months traded higher on expectations of a green energy renaissance. That excitement spilled over into EV penny stocks. Companies that either manufactured a vehicle, had charging stations, or even had some exposure to battery supply chains grabbed the coattails of the EV trend.
Many of these have yet to subside. But 2021 was focused on new industries, or at least those that weren’t mainstream. Things like bitcoin and blockchain technology stocks, fintech, and even psychedelic penny stocks have come to light.
Two (former) penny stocks posted explosive gains on Monday. Was it EV companies or maybe some kind of alternative energy technology companies? No, but if you’re up to date on the latest cryptocurrency and blockchain trends, you might be familiar with what I’m about to write next. Speculative excitement brought these two companies into focus thanks to the new NFT trend in finance.
What is an NFT?
In case this is totally unfamiliar to you, NFT stands for Non-Fungible Token. Before you start looking Buy NFT penny stocks, let’s cover some of the basics to understand this new trend. This “new” thing has theoretically been around for a while. But it was recently brought to light when several separate pieces began to connect for investors and traders alike.
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NFTs are digital “things”. An NFT can be a digital artwork, a video clip, or even a GIF. A basic example is to think of it as a 1-of-1 digital trading card. Once created, it is uploaded to an NFT marketplace and its unique identity and ownership is verified on a proof-of-work blockchain.
What are NFTs used for?
In theory, there can be multiple uses for NFTs. First, they are essentially digital collectibles. For example, a recent big headline related to NFTs has been the $69 million art sale at auction house Christie’s. The work was done by digital artist Beeple and was called Everydays: The First 5000 Days. This record-breaking sale was one of the key catalysts behind the recent non-fungible token flurry. However, beyond collectibility, there are other uses for NFTs.
NFTs can also be in-game assets controlled by a user instead of the game developer. These NFTs allow assets to be traded on third-party marketplaces without the permission of the game developer. They can also be used for access. Think of things like music events or live streaming entertainment. It essentially creates a situation where only those who bought or own certain NFTs can gain access. But there are likely many more uses that people will find as the industry evolves.
Additionally, these cannot be purchased with cash, and the Ethereum platform is generally preferred for trading NFTs.
Celebrities add fuel to the NFT fire
As with most things this year, celebrity attraction to “abnormal” subjects is at an all-time high. Gene Simmons, Snoop Dogg, Elon Musk and others recently got behind the Dogecoin hype. The meme coin was created as a hoax and seems to have unlimited availability. However, it was sought by those who wished to go against tradition in a somewhat rebellious attitude against the ‘establishment’.
We’ve also seen heavyweights like Mark Cuban, Dave Portnoy and Chamath Palihapitiya rallied behind the Wall Street Bets community as “the suits” came under tight pressure at GameStop for Forever. So why shouldn’t celebrities latch on to the NFT craze? Most notably, Elon Musk’s wife and musician Grimes sold around $6 million worth of tokens representing digital art on an NFT exchange site.
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There are even a number of NFTs being pushed by NFL star Rob Gronkowski. One of the most valuable NFTs in this “GRONK” series is a 1-of-1 career highlight “card” that also comes with perks. Those perks include meeting GRONK and tickets to one of his games next season.
NFT stocks are now a ‘thing’
Now that you have a little background on the subject, let’s take a look at the latest market hype: NFT Shares. It looks like speculation is king right now, and here’s why I’m saying that. Former penny-stock firm ZK International (NASDAQ: ZKIN) actually released NFT-related news on Monday.
The company’s subsidiary, xSigma Corporation, said it will launch its latest venture to get involved in the industry. In this case, xSigma creates an NFT marketplace where users can buy and sell these tokens.
The interesting part is that the movement in the market was “only about 36%.” I’m just saying that for the simple fact that two other penny stocks didn’t release any news but saw their shares soar over 100% during Monday’s late afternoon session.
Penny Stocks Surge Over 100% on NFT Speculation
In this case, shares of Oriental Culture Holding Ltd (NASDAQ: OCG) and Taken Art Co Ltd (NYSE: TKAT) saw explosive moves in the stock market. Neither company published headlines or released supporting documents that could remotely have been a catalyst for the recent moves. What they did have, however, were business models focused on online art sales.
Oriental in particular provides a platform for trading collectibles and commodities. Meanwhile, Takung enables collectors and investors to acquire joint ownership of Asian and other fine arts. Interestingly, if you look at their respective websites, there are eerily similar aspects between the two. While there’s no obvious connection on the surface, it’s something interesting to note.
In any case, NFT speculation has given a boost to these former penny stocks. at the closing bell, TKAT share had risen from $4.06 at the open to highs of $9.30. shares of OCG stock had risen from $4.61 at the opening bell to highs of $9.65 by the end of the session. Will this mark the debut of a new class called NFT Penny Stocks? Leave a comment below if you start following stocks with engagement in this new arena.
