Established firms get absorbed into the Crypto mania

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10 Jan, 2018

Established firms get absorbed into the Crypto mania

Household names like Kodak and Seagate have jumped the blockchain craze and submitted their initial coin offerings, with their stocks skyrocketing as a result.

Kodak looked poised to double for a second day after revealing it will sell a token, while Seagate Technology jumped more than 16% on Monday after a simple blog mention hinted it was entering the space.

The marked flood of higher-profile names is perhaps the next logical step for a frenzy that has generated massive paper profits (and losses in some cases) for many comers in recent weeks. Long Island Iced Tea Corp. became the poster child for the craze, when its shares tripled after morphing into Long Blockchain.

At the same time, Bitcoin, the biggest cryptocurrency, is struggling to hold onto its 1,400% gain from last year. Smaller rivals from ripple to bitcoin cash have grown considerably as investors look for new ways to tap into the euphoric sentiment surrounding anything crypto.

For all the incessant coverage of the craze, even on tabloid newspapers, there still remain just as many naysayers, however. On Wednesday, billionaire Warren Buffett said on CNBC that most digital coins won’t hold their value.

“In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending,” Buffett said. “Now when it happens, or how or anything else, I don’t know. But I know this: If I could buy a five year-put on every one of the cryptocurrencies, I’d be glad to do it, but I would never short a dime’s worth.”

Still, experienced day-traders are attempting to ride the wave of crypto buying that inevitably follows firms which suddenly decide to reinvent themselves as blockchain ventures. That’s enough, market watchers say, to bring in high-frequency traders and computer algos.

“The interest in these stocks is so strong because many traders like me are so hungry for the increased volatility,” said Jim DePorre, a professional day trader and founder of sharkinvesting.com. “I know that there are still traders willing to jump in, so who cares if the stock has questionable value?”

Kodak shares soared about 70% pre-market after having already doubled on Tuesday. The company will launch a “photo-centric cryptocurrency” called Kodakoin.

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