What happened

Shares of Overstock.com, Inc. (NASDAQ:OSTK) were skyrocketing Wednesday after the online retailer said it would participate in a joint venture to launch a cryptocurrency trading market.

Though the venture seems to take Overstock far away from its core focus of online retail, this is not the company's first foray into the blockchain as its subsidiary tZero launched the first SEC-compliant Alternative Trading System for Blockchain in 2015 as well as the first private blockchain bond offering.

The stock closed up 23.5% on the news.

A finger pushes on a digital dollar sign.

Image source: Getty Images.

So what

Overstock's tZero subsidiary will partner with RenGen LLC and Argon Group on the venture, bringing in specialists in advisory services and electronic trading.

In its press release, Overstock noted that initial coin offerings have raised over $2 billion this year, indicating a potentially lucrative market for an exchange.

Now what

Overstock shares reached a three-year high on the news, a sign that previous blockchain announcements did not have the same effect on the stock. Despite the success of Bitcoin, which has soared in value, the cryptocurrency market remains highly speculative as Bitcoin's value has been called a bubble by a number of economists and analysts.

Overstock is hopeful that its plan and the future of cryptocurrencies will pass regulatory muster, but Wednesday's move, like the rest of digital currency, is based on speculation. Risk-seeking investors and blockchain bulls may want to take the ride, but more conventional investors may want to use this opportunity to take profits in Overstock.