Blockchain Hype

Cryptocurrency exploded in 2017. It is one of the hottest topic among investors. There are more than 10 different cryptocurrencies you could invest in. There are going to be more cryptocurrencies in the future. Blockchain technology is the core of cryptocurrency. That is where some of the so called “blockchain” companies come in. Because of this blockchain hype, we saw some micro-cap stocks exploded in the final two months of 2017. Their share prices jumped to all time high of the year. These are some of tickers: MARA, DPW, RIOT, LFIN,LTEA,TEUM etc. The blockchain hype has become kind of ridiculous. For example, there was this Long Island Iced Tea Corp. changed its name to Long Blockchain Corp. last month. Its share price was instantly up over 200% in the same day. Moreover, there is a small cap finance company called Longfin. Its IPO price was $5, its share price soared to over 2000% after the news of acquiring a small blockchain company broke two days later. Most of these companies are not profitable. Also, they have very low public float which leads to extreme volatility in their stocks prices.  As a result, there were a lot of people trying to chase the hype and invest into these companies, ended up losing a lot of money. There is no doubt that some early birds made huge gains on their crypto investments. There might potentially be more opportunities in the field of digital currency as technology advancing further. As of now,  we still look at cryptocurrency as a very risky investment. If you really want to give it a try, we recommend to trade with caution and do not hold it overnight because most of these stocks are related to price of bitcoin, and bitcoin runs 24/7. Holding overnight could have risk due to decline from bitcoin’s price. After all, please do your own DD before any investments.

P.S. We will keep an eye on future development and revisit this technology at a later date. Have a great 2018 and happy investing!!

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