The cryptocurrency frenzy seems to have no bounds. Following an announcement by LongFin Corp that the firm has purchased a crypto-related company, the stock that just recently entered the market saw an enormous spike of more than 1,300%. The acquired company is called Ziddu, a Singapore based “blockchain-empowered global micro-lending solutions provider.”
After implementing its IPO one week earlier, and incurring a share price of $5.45 on Thursday, the stock saw tremendous market reaction to the crypto news, with its price exceeding $142 per share at its highest point.
The market has since seen a downward correction, currently valued at $68.27 at the time of this writing. Trading volume was also substantially above the stock’s average of 241,000 shares, averaging just under 12 million shares over the past couple of days.
LongFin CEO Venkat Meenavalli has expressed concern over the rapid ascent of the company’s stock price, stating: “We are a profitable company. … We have nothing to do with this euphoric mania. This market cap is not justified. I valued my IPO pricing at $5.” Mr. Meenavalli attributes the price hike directly to the buzz surrounding cryptos at the moment. It is noteworthy and alarming that he owns 95% of Ziddu, further illustrating the public craze over blockchain technology.
What to Look for in a Forex Technology Provider?Go to article >>
Crypto Technology Extends Reach
LongFin is a USA-based global fintech firm, and describes itself as a “blockchain research company developing decentralized application for micro lending and warehouse financing.” The company offers a variety of financial services, including importer and exporter financing, trade insurance backed financing, and financial institution intermediation.
The purchase of Ziddu is aimed at extending the company’s capability to offer its services on the blockchain. By integrating Ziddu’s blockchain technology into LongFin’s financing network, importers and exporters will be able to receive financing in the form of cryptocurrencies: “Ziddu Warehouse Coin is a smart contract that enables Importers and Exporters to use their Ziddu coins that are loosely pegged to Ethereum and Bitcoin Crypto Currency. The Importers/Exporters convert offered Ziddu coins into Ethereum and Bitcoin Cryptocurrencies and use the proceeds for their working capital needs.”
Are We Seeing a Phenomenon?
LongFin is not the only company benefiting from its association with the crypto world. Yesterday, the SEC suspended trading on a small, publicly listed cryptocurrency company. The Crypto Company, based in Malibu California, has seen its stock price increase by 1,800% over the past month. According to its website, The Crypto Company “provides institutions and individuals direct exposure to the growth of global blockchain developments,” in the form of consulting and technological services.
The SEC halted all trading on the company’s stock, amid concerns over potential price manipulation. The SEC has been increasingly active in addressing abnormalities related to cryptocurrencies. Over the last few months, the US government has been monitoring and targeting the crypto industry in an effort to assure proper and legitimate activity.
Crypto is the Keyword
Popularity and hearsay over cryptocurrencies are on a steep upward trajectory. According to Verisign, there has been a strong push toward purchasing crypto-related domain names. The company posted a statement saying “there is a correlation between domain name registrations and newsworthy and popular events, as well as anticipated trends.”
Moreover, 90% of every keyword registered is related to the crypto industry. GoDaddy further confirmed the growing trend, adding that domain names containing the words Bitcoin and Ethereum have risen by 400% and 500%, respectively.