Retail Traders Flock to NFT Stocks as Speculation & Volatility Fuel the Market
NFT or non-fungible tokens have become the centerpiece of speculative trading activity recently which has led to massive spikes in price per share for certain stocks & penny stocks.
To put it simply, NFTs are digital “things.” An NFT can be a digital artwork, a video clip, a gif, a tweet, or even a digital trading card. An elementary example is to think of it as a 1 of 1 digital item. Once it is created, it gets uploaded to an NFT marketplace. Its unique identity and ownership are then verified on a proof-of-work blockchain. Digital artist, Beeple ended up selling a piece of artwork for $69 million. This marked the first major NFT sale ever.
NFT stocks have certain things in common, for example, exposure to specific industries. If a company has some involvement in blockchain technology, entertainment, or online retail of digital assets, there is a good chance traders are speculating on it right now.
NFT Stocks to Buy?
Normally there is a high level of speculation around penny stocks but throw in an emerging sector involving NFT Stocks and you have a perfect storm for that speculation to reach new highs which as of recently has contributed to 4 NFT stocks rising to the top of the sector leaving investors with the question: Should I buy these NFT Stocks?
-
Color Star Technology Co. Ltd. (NASDAQ: CSCW)
-
Cinedigm Corp (NASDAQ: CIDM)
-
Dolphin Entertainment (NASDAQ: DLPN)
-
Hall of Fame Resort Entertainment (NASDAQ: HOFV)
Color Star Technology Co. Ltd. (NASDAQ: CSCW)
Color Star Technology was initially one of the education technology penny stocks to watch during the pandemic. With virtual learning gaining ground many related names caught sympathy momentum. (NASDAQ: CSCW) was one of them. As things have progressed, Color Star has evolved into a digital entertainment company. Where does the NFT tie-in come from?
There may have been some speculation stemming from a recent update. Color Star signed a deal with Doman (HK) Ltd. It will use blockchain technology support for Color Star’s interactive entertainment platform software, Color World APP. In the press release last week, the company said:
“A platform user who is currently unknown, but has strong creative abilities, might use this platform to help showcase his hidden talents; the copyright exchange platform of the Color Star APP may quickly match him to those who can appreciate and understand the value of his work…Through this platform, people may find their favorite works in one stop, and as the Color Star APP becomes integrated with AR technology, it should turn copyrights from plain text into vivid presentation, thereby allowing everyone to appreciate the talented works of others.“
Cinedigm Corp (NASDAQ: CIDM)
This company has a few moving parts that could connect some dots. Or, at the very least, it could explain why (NASDAQ: CIDM) stock has gotten lumped into the NFT space. The company, at its core, is a streaming entertainment company. Do you know what has a minority interest in Cinedigm? A company called Wizard World. Cinedigm also launched CONtv, a Comic-Con branded channel in partnership with Wizard, in 2015.
Why might this be important? Wizard announced this month that it would be getting into the NFT space. Using decades of exclusive Wizard World convention videos, recorded live interviews, and memorabilia, the company plans on creating NFTs to offer its fans.
“The launch of Wizard World’s NFTs will be an integral part of Wizard World’s progression into a technology company that builds global interactive online communities for affinity groups by sourcing, producing, marketing, and streaming exclusive proprietary events and Signature Series, while monetizing unique content from the past and present through Wizard World Vault and NFTs.”
Something like this was discussed yesterday with the tie-in between Liquid Media (NASDAQ: YVR) and Atari (OTC: PONGF). Sympathy sentiment played a role in those stocks; will that be the same for CIDM? It should be noted that Cinedigm hasn’t come straight out to discuss any NFT related news. So, keep that in mind if it’s on your list of penny stocks to watch.
Hall of Fame Resort Entertainment (NASDAQ: HOFV) and Dolphin Entertainment (NASDAQ: DLPN)
This week, (NASDAQ: HOFV) stock price continued to rally on the overall NFT Stock speculation, currently within the market. The company would later come out to say that it is getting familiar with the new trend and exploring options. Tuesday 3/23/2021, Hall of Fame announced a deal with the entertainment company and former penny stock, Dolphin Entertainment (NASDAQ: DLPN).
The deal aims to offer NFTs that will allow fans of professional football and sports entertainment to buy and sell exclusive content developed by Hall of Fame and its partners. Both penny stocks (now former) surged during the early days of this week.
If you were previously familiar with (NASDAQ: HOFV), it was likely as esports and the “reopening trade” had begun focusing on related stocks. The heart of Hall Of Fame’s business model entails things like its Hall of Fame Village powered by Johnson Controls. This is right near the site of the NFL Hall of Fame.
Hotels, interactive media areas, etc., are all planned for this build. Outside of this, Hall Of Fame is also getting into things like fantasy football, which it aims to launch ahead of the 2021 football season. However, speculation is buzzing about (NASDAQ: HOFV) as one of the NFT penny stocks to watch after the deal with Dolphin this week.
The Basics of Penny Stocks
Penny stocks are volatile, and with that their stock price tends to move up and down, a lot, which is why it is important to remember the basics of trading penny stocks.
On Tuesday 3/23/2021 Hall of Fame Resort Entertainment (NASDAQ: HOFV) provided a great example of penny stock volatility, as the stock price swung from highs of $5 to lows of under $4. This example best displays the stress penny stocks can have on investors.
Penny Stocks are naturally volatile, but when you throw in outside factors such as the recent emergence of NFT Stocks you have all the best ingredients for massive speculation and volatility that is set to new highs!
When trading Penny Stocks or any Stock it is very important that you consider the risk vs reward and stick to your risk management to help minimize loss and increase the chance of potential gains.
Photo by Aleksandar Pasaric from Pexels.
See more from Benzinga
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
