NFT Stocks Gain Sympathy Momentum & 3 More Penny Stocks To Watch

NFT Stocks Are Taking Retail Accounts By Storm

Unless you’ve been living under a rock, many penny stocks have gotten lumped into a new category. This category is labeled NFT stocks. NFT or non-fungible tokens have become the centerpiece of speculative trading activity recently. More akin to the early days of pot stocks, bitcoin stocks, and even electric vehicle penny stocks, the thought of “future potential” has lead to massive spikes in certain names.

These NFT stocks have certain things in common. One of these things is exposure to specific industries. If a company has some involvement in blockchain technology, entertainment, or online retail of digital assets, there’s a good chance traders are speculating on it right now. Where did this all start? Digital artist, Beeple ended up selling a piece of artwork for $69 million. This marked the first major NFT sale ever.

What Are NFTs?

NFTs are digital "things." An NFT can be a digital artwork, a video clip, a gif, a tweet, or even a digital trading card. An elementary example is to think of it as a 1 of 1 digital item. Once it is created, it gets uploaded to an NFT marketplace. Its unique identity and ownership are then verified on a proof-of-work blockchain.

Whether it was Elon Musk selling a song about NFTs, Jack Dorsey selling his first tweet, or artists like Beeple selling virtual artwork for millions, these events have brought plenty of attention to the topic of NFTs.

But herein lies “the rub,” which is the fact that this is still likely the prelude to an industry just “stretching its legs.” We’ve seen a similar situation where the whisper of certain phases triggers rampant buying in a given sector. Think back to the early days of marijuana stocks, cryptocurrency, and even “COVID stocks” from last year. Many times, it didn’t matter what the company did.

If the topic was mentioned, retail traders frothed at the mouth to gain exposure. In many cases, unless they were equipped to trade highly volatile stocks, many learned a valuable lesson: “trendy stocks” can go down just as quickly as they go up. And I believe we’ve also seen a bit of this in NFT stocks recently.

Should You Buy NFT Stocks Right Now?

This leads to the ultimate question: should you buy NFT stocks right now? Look at a few early runners: Oriental Culture Holding Ltd OCG and Takung Art Co Ltd TKAT. These companies made no mention of getting into the NFT industry. However, based on their “about” sections, traders took that as a cue that they “could potentially” have exposure to this trend. Needless to say, both have gone on epic rallies even since our first article this month. In any event, it opened up the latest can of worms that has evolved into this new trend.

Now we may be in the higher-speculation phase of this trend. One that has taken this idea further. Tuesday morning we discussed 3 more NFT stocks that may have been missed, all of which saw big momentum on Tuesday. So now what? Thanks to aftermarket momentum in many related companies, it might be time to look at another round of NFT stocks to watch.

More NFT Penny Stocks To Watch

Keep in mind that speculation is huge right now. The sympathy momentum has triggered a surge in countless names. In particular, there may be 3 more penny stocks to watch if the NFT trend is on your mind.

Color Star Technology Co. Ltd. CSCW
Cinedigm Corp CIDM
Hall of Fame Resort Entertainment HOFV

Color Star Technology Co. Ltd.

We’ve discussed this company plenty of times in the past. It was initially one of the education technology penny stocks to watch during the pandemic. With virtual learning gaining ground many related names caught sympathy momentum. CSCW was one of them. As things have progressed, Color Star has evolved into a digital entertainment company. Where does the NFT tie-in come from?

There may have been some speculation stemming from a recent update. Color Star signed a deal with Doman (HK) Ltd. It will use blockchain technology support for Color Star's interactive entertainment platform software, Color World APP. In the press release last week, the company said:

"A platform user who is currently unknown, but has strong creative abilities, might use this platform to help showcase his hidden talents; the copyright exchange platform of the Color Star APP may quickly match him to those who can appreciate and understand the value of his work…Through this platform, people may find their favorite works in one stop, and as the Color Star APP becomes integrated with AR technology, it should turn copyrights from plain text into vivid presentation, thereby allowing everyone to appreciate the talented works of others."

Cinedigm Corp

This company has a few moving parts that could connect some dots. Or, at the very least, it could explain why CIDM stock has gotten lumped into the NFT space. The company, at its core, is a streaming entertainment company. Do you know what has a minority interest in Cinedigm? A company called Wizard World. Cinedigm also launched CONtv, a Comic-Con branded channel in partnership with Wizard, in 2015.

Why might this important? Wizard announced this month that it would actually be getting into the NFT space. Using decades of exclusive Wizard World convention videos, recorded live interviews, and memorabilia, the company plans on creating NFTs to offer its fans.

“The launch of Wizard World's NFTs will be an integral part of Wizard World's progression into a technology company that builds global interactive online communities for affinity groups by sourcing, producing, marketing, and streaming exclusive proprietary events and Signature Series, while monetizing unique content from the past and present through Wizard World Vault and NFTs.”

Something similar to this was discussed yesterday with the tie-in between Liquid Media YVR and Atari PONGF. Sympathy sentiment played a role in those stocks; will that be the same for CIDM? It should be noted that Cinedigm hasn’t come straight out to discuss any NFT related news. So keep that in mind if it’s on your list of penny stocks to watch.

Hall Of Fame Resort Entertainment

This week, Hall Of Fame Resorts continued a rally that began last week on NFT speculation. The company would later come out to say that it is getting familiar with the new trend and exploring options. Tuesday, Hall of Fame announced a deal with the entertainment company and former penny stock, Dolphin Entertainment DLPN.

The deal aims to offer NFTs that will allow fans of professional football and sports entertainment to buy and sell exclusive content developed by Hall of Fame and its partners. Both penny stocks (now former) surged during the early days of this week.

If you were previously familiar with HOFV, it was likely as esports and the “reopening trade” had begun focusing on related stocks. The heart of Hall Of Fame’s business model entails things like its Hall of Fame Village powered by Johnson Controls. This is right near the site of the NFL Hall of Fame.

Hotels, interactive media areas, etc., are all planned for this build. Outside of this, Hall Of Fame is also getting into things like fantasy football, which it aims to launch ahead of the 2021 football season. However, now, speculation is buzzing about HOFV as one of the NFT penny stocks to watch after the deal with Dolphin this week.

Don’t Forget The Basics Of Penny Stocks

I won’t get into how to day trade, but I feel some people need a reminder. Penny stocks are inherently volatile, and with that, prices tend to fluctuate frequently. Look at how HOFV stock, for instance, performed during the trading day on Tuesday. It swung from highs of over $5 to lows of under $4 in the same trading session. Without a stomach for that kind of volatility, penny stocks like this can be incredibly stressful.

Furthermore, in light of speculation acting as one of the main driving forces behind some of these stocks, that volatility factor can be amplified, as we’ve already seen with many NFT stocks. Make sure not to forget the basics of penny stocks and keep your risk/reward in mind if you’re exploring a niche like this.

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