What happened
Shares of the online platform Takung Art (NYSEMKT: TKAT) traded more than 31% higher as of 11:10 a.m. EDT this morning for no apparent reason.
So what
Shares of Takung continue to swing wildly as investors speculate whether the company will jump into the nonfungible token (NFT) space.
NFTs are digital files such as art, videos, and audio stored on blockchain, which is the digital ledger technology that powers cryptocurrencies. Some NFTs have already sold for millions of dollars, pushing some companies to begin offering NFTs, and many to believe the asset class has huge potential, not unlike the earlier days of cryptocurrencies.
Image source: Getty Images.
Takung is not in the NFT space yet, but many believe the company could be prime a suspect to jump in because it runs an online platform that allows artists, art dealers, and investors to exchange and invest in artwork. This would seem like an ideal platform to begin offering digital art, a large NFT category.
Now what
Over the last year, shares of Takung have risen from $1.35 per share to roughly $26.60 per share now. The run-up does not seem realistic even if the company were to get into the NFT space.
Furthermore, the NFT market is comprised of a new asset class that could be incredibly volatile, so I would trade with extreme caution here and thoroughly analyze the company before considering investing.
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