Long presumed extinct by pretty much everyone who owns a smartphone, Eastman Kodak Co. (NYSE:KODK) revived its fortunes on the stock market in January when it announced it was launching its own cryptocurrency.
Share prices for the once-bankrupt film and camera company more than doubled to US$6.80 at the close of markets following the January 9 announcement of KodakCoin.
It followed a pattern similar to beverage maker Long Island Iced Tea Corp., which changed its name to Long Blockchain Corp. (Nasdaq:LBCC) in December. Shares rose nearly 300% in one day of trading.
Vancouver has not been immune to the blockchain and cryptocurrency craze sweeping investors.
Eleven publicly traded companies incorporated in Vancouver – more than in any other city in Canada – have either launched or changed their names in the past year to reflect blockchain-adjacent activities, according to documents filed on Sedar.
Many of the companies have seen share prices go up on the same day they’ve announced they’re either acquiring a blockchain-related company or investing in specialized computers for cryptocurrency mining.
Hive Blockchain Technologies Ltd. (TSX-V:HIVE) listed on the Canadian markets through a reverse takeover of a physical – not digital – mining company in September; its share prices jumped nearly 200% in six weeks. Share prices have settled to 83% growth since the reverse takeover.
Prior to the acquisition of a New York-based cryptocurrency mining company, HashChain Technology Inc. (TSX-V: KASH) was known simply as Chortle Capital Corp.
Meanwhile, Vancouver-based junior miners like MX Gold Corp. (TSX-V:MXL) haven’t changed their names. But its January 8 announcement that it was investing in cryptocurrency mining systems sent its share prices up 30%.
Blockchain serves as an electronic ledger that cannot be manipulated by a central authority. Buying and selling cryptocurrencies like Bitcoin is made secure through blockchain.
While some may debate the value of Bitcoin, blockchain is widely considered to be a legitimate and innovative technology.
Jason Del Vicario, a portfolio manager at HollisWealth, is urging his clients to perform due diligence before embarking on investments in the new technology.
He cautioned in a January 10 clients’ note that with at least 1,100 digital currencies out there, investors should put in only as much money as they’re willing to lose.
“My understanding is the blockchain technology itself is quite brilliant and that is most likely to be here to stay,” Del Vicario told Business in Vancouver.
But he said many investors have a fear of missing out that is driving them to put their money into questionable or nascent cryptocurrencies as they witness prices soar on exchanges.
“I can honestly say I have no fear of missing out … [of buying] blockchain,” he said, adding regulators will likely tighten up rules within the next five years that will make the value of cryptocurrencies drop.
“My sense is that this is generation X’s bubble.”
Del Vicario said the current cryptocurrency craze has parallels to the late ’90s tech boom, when companies would add “.com” to their names and see share prices soar.
That bubble eventually burst.
But Dave Feller, CEO of Vancouver-based financial technology company Mogo (TSX:MOGO), sees cryptocurrencies not as “generation X’s bubble” but as the “millennial version of digital gold.”
In January, the online wealth management company added a cryptocurrency tool to its platform that allows users to buy and sell Bitcoin.
“Essentially, nobody’s looking at it as a currency right now,” Feller told BIV.
Instead, he said Mogo users, who veer younger, have expressed interest in using Bitcoin as an investment like any other stock.
“It’s sort of like when there’s a gold rush: sell shovels,” Del Vicario said.
