Takung Art Co., Ltd (TKAT) stock prices are up a monumental 22.40% on April 22nd, 2021, soaring to heights of USD$25.08.
TKAT Soars Based on Speculation
The biggest driving force between recent surges in TKAT stock prices is speculation. Given that the company operates an online platform that facilitates the exchange of and investing in artwork by artists, art dealers, and investors, they are a prime candidate for a move into the NFT sector.
Scope of NFT Sector
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Non-fungible tokens make use of blockchain technology to store digital files. Art, videos and audio are a few of the broad categories that can be stored on the digital ledger technology that also enables the trading of cryptocurrency. Just like cryptocurrency, the NFT sector is burgeoning, with many anticipating an explosion akin to that of cryptocurrency as of late.
What are NFTs?
NFTs signify digital ownership of various physical and digital items, with items as unlikely as a tweet from social media platform Twitter being sold for millions of dollars. In the same way blockchain technology secures cryptocurrency, so too would NFTs be secured against being copied or stolen.
What does TKAT do?
Hitherto, TKAT has facilitated the participation of collectors and investors in the Asian art market, while safeguarding them against forgery or price manipulation. Through the online trading platform, users can acquire shared ownership of various modes of artwork, including calligraphies and paintings. Investors speculate that the move into the NFT sector would be a natural progression for the Hong Kong-based company.
Extent of Speculation
With shares having soared by a staggering 987.75% in March of 2021 despite an absence of clear indicators that the company is heading into the NFT space, if the company had not considered it before, the surge in their equity value could be a convincing factor to do so. Nevertheless, NFTs are an up and coming technology, with a very high measure of risk. The risk comes from the difficulty in evaluating the value of the traded token, such as the multi-million dollar tweet.
Volatile Future for NFTs
With a market cap of USD$36.75 million in March 2021, April has seen TKAT’s market cap soar to USD$378 million, an increase by a factor of more than 10. Furthermore, it remains to be seen if NFTs have the staying power in the collectibles market for them to be a long-term, sustainable investment. As more meaningful applicability of NFTs is being explored, investors are seeing a very volatile market that could potentially rival the cryptocurrency boom.