The cryptocurrency craze has reached new heights, and it’s no longer limited to just the price of digital currencies.
Have you ever heard of LongFin? No? That’s because the small financial technology company just started trading last week. But in a matter of days the startup’s stock skyrocketed 2,400 percent.
This unbelievable boost in value came after LongFin announced they were acquiring a blockchain company, igniting huge interest from investors who are eager to find any and all moneymaking avenues from the current surging value of cryptocurrencies like bitcoin.
LongFin’s story is a short one, but one that seems to be becoming commonplace as bitcoin mania grips the financial market. The company says it provides financial assistance to importers, exporters, and enterprises using artificial intelligence and machine learning. Those are services that are useful, but not necessarily anything special. Plenty of other fintech companies offer similar assistance without enjoying a 2,400 percent increase in stock value.
What rocketed LongFin into the spotlight was their acquisition of Ziddu.com, a startup that uses that makes small loans in cryptocurrencies. LongFin’s IPO started at around $15 a share. The day they bought Ziddu their stock jumped to just over $140 per share.
This showed just how hungry traders are to get a stake in the cryptocurrency business, but this initial hype didn’t last very long. At the time of writing LongFin’s stock is hovering just over $60 a share — still four times what it was initially, but not the ridiculous initial surge.
LongFin CEO Venkat Meenvalli said the cryptocurrency-fueled increase in stock value was more than his company had bargained for, but he was optimistic that this increased attention would give investors a chance to take a longer look at what his company has to offer once that initial excitement wears off.
“It’s crazy, frenzied speculation on the cryptocurrency announcement, which we never expected,” Meenvalli told Bloomberg. “The fundamentals will slowly show, but this is crazy trading and has nothing to do with the company’s fundamentals.”
Remember, if you’re looking to invest in new companies in the crypto-sector stay informed and trade responsibly. Prices can skyrocket just as fast as they can tumble.