Just when it looked like the non-fungible token (NFT) craze might be slowing down, shares of Takung Art (TKAT -1.59%) jumped more than 22%, as of 10:40 a.m. EDT, for no apparent reason other than investor speculation that the company may jump into the NFT space.
Takung has been a part of a basket of stocks that investors seem to think may enter the NFT space. Takung is not currently in the NFT space yet, but many believe the company could be a prime suspect to get 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.
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.
Although it is just speculation, it is possible that Takung eventually jumps into the NFT space, given the demand from investors. Another stock long rumored to be an NFT candidate, Hall of Fame Resort & Entertainment, eventually did make the move, which led to shares skyrocketing.
Regardless, I still would not invest in Takung based on NFT speculation alone. NFTs are a new asset class and still very volatile. It is unclear how much worth, if any, NFTs will have in the future.