Reports hit the press this week that the Securities and Exchange Commission (SEC) has halted buying and selling of the Chinese blockchain firm UBI Blockchain Internet. The company cited doubtlessly inaccurate info within the firm’s disclosures in addition to “latest, uncommon and unexplained market exercise” because the components behind its determination. Between December 11 and 18 final yr, UBI’s share value inexplicably soared from $9 per share to $87 per share – a acquire of over 860%. Prices have since settled all the way down to $22 per share as of Friday.
Per the SEC, the buying and selling halt will stay in place till January 22, 2018.
The cryptocurrency area has attracted an enormous quantity of speculative capital over the previous twelve months and a big portion of this capital has been directed in the direction of shopping for bitcoin and varied different cryptocurrencies immediately.
And it’s paid off.
Sure, we’re at present seeing a little bit of corrective motion in the meanwhile, however lots of the high 20 cash by market capitalization returned hundreds of proportion factors in features all through 2017.
Some of the speculative capital, nevertheless, went elsewhere. ICO funding, after all, accounts for a lot of it however there’s one other sort of publicity that pulls investor consideration – publicly traded firms.
For many (and particularly for the extra conventional equities traders), shopping for and holding bitcoin, ICO tokens or some other type of cryptocurrency remains to be out of attain from a technical data and safety standpoint. However, in order to not miss out on the potential for reward, these traders sought different exposures and publicly traded firms that declare a reference to bitcoin and/or blockchain tech match the invoice.
Unfortunately, many of those firms who claiming such ties, some even going as far as to vary their enterprise names, in actuality, have solely probably the most tenuous of hyperlinks to the digital forex.
Investors pour in after Long Island Iced Tea turns into Long Blockchain Want to extend firm worth on the open market? Just change your identify to one thing blockchain. At least, that labored for the Long Island Iced Tea Corp.. https://t.co/miZUKBkH5K
— Mon Watson (@olansha1) December 25, 2017
Looking The Other Way
Markets don’t appear too bothered in regards to the technicalities, nevertheless. UBI rose from lower than $10 a share to only shy of $90 inside ten days throughout mid-December, according to the rise within the value of Bitcoin and quite a few different main cryptocurrencies.
A few firms on this area have already fallen sufferer to buying and selling halts and UBI Blockchain is simply one other identify on this record. Of course, whether or not the SEC will discover something to justify the halt stays to be seen. These halts are preventative responses that function a form of discovery interval versus a response to any particular wrongdoing, however they serve to focus on the truth that the danger related to this area proper now’s removed from restricted to fraudulent ICOs and risky cryptocurrencies.
Are you a UBI shareholder? What do you consider investing in crypto by publicly traded firms? Let us know within the feedback beneath.
Images courtesy of Wikimedia Commons, Bloomberg
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