Shares of Takung Art (TKAT) soared 989.7% in March, according to data from S&P Global Market Intelligence. Excitement built around non-fungible tokens (NFTs) last month, and the Hong Kong-based online art platform's stock soared as a result.
NFTs are blockchain-based digital tokens that can be used to store and define ownership of files that can't be copied, and some investors believe that the technology will become a vehicle for distributing and owning art, music, and video files. Bulls are hoping that NFTs will create a big market for digital collectibles and that this new trend will push Takung Art's business to the next level.
Takung Art operates a platform that allows investors to purchase and trade for art including paintings, calligraphies, jewelry, and precious gems. It's not clear to what extent the company will get involved with the NFT space, but the potential for its platform to become a trading post for art stored on the blockchain technology prompted huge growth for its share price last month.
Takung Art stock has continued to climb early in April. The company's share price is up roughly 1.6% in the month so far.
Takung has posted incredible gains recently, and its incredible rise suggests that investors without very high risk tolerance should steer clear of the stock. Even investors who aren't averse to volatility should proceed with caution.
The market for NFTs is essentially brand new, and it's hard to tell whether the blockchain-based technology will see meaningful adoption or have staying power in the collectibles market. Even if NFT technologies help spur broad adoption for digital collectibles, that doesn't guarantee that Takung's business will be successful.
The company now has a market capitalization of roughly $378 million, up from the market cap of roughly 36.75 million at the beginning of March.