Color Star Technology Co Ltd (NASDAQ: CSCW) is making a run for the top early on this morning, trading on gains of nearly 10%. However, there have been no press releases or SEC filings that are acting as a catalyst for the movement.
While there is no news, there’s quite a bit of chatter about the company’s recent announcement that it plans on jumping into NFTs, which seems to be the driving force behind the run this morning. Here’s what’s going on:
Investors Add Color To Their NFT Portfolios With Color Star Technology
In a press release issued just over a week ago, Color Star Technology announced that it would be developing non-fungible tokens, or NFTs for its entertainment business.
NFTs have been all the rage lately, with the first tweet on Twitter fetching nearly $3 million as a token, along with one of these unique digital tokens selling for more than $69 million in early march.
Essentially, these tokens are a form of digital art that are stored on the blockchain. Why they’re valuable is up in the air, but one thing is for sure, the market has been going crazy for them.
Nonetheless, Color Star intends on playing on the field and sees a huge opportunity in bringing this offering to its entertainment business.
With this new focus on these tokens, the company will work to bring attention to its TV programs, music, artist videos, museum collections, and more, providing tokenized ownership in the process.
Will This Idea Go Anywhere?
Any time something new becomes popular, we seem to watch as everyone and their parents get involved, hoping to create the latest and greatest product in the space. We’ve been watching this take place with cryptocurrencies, COVID-19 vaccines and treatments, and a long-list of other trending concepts.
So, the real question here is whether or not Color Star Technology’s NFTs will actually go anywhere, and that’s one that’s very difficult to answer.
All told, I think the company may be sitting on a gold mine. Here’s why:
NFTs have become a popular form of digital art, and its an exciting new business. So, the company has the excitement of a new concept to bank on. However, that’s not the only thing the company can bank on here.
The fact of the matter is that both the entertainment business, and the non-fungible tokens business, work very well together. Ultimately, what we’re talking about here is art, and NFTs provide an ability to gain ownership of art on the blockchain.
While cartoon depictions of kittens and punks have garnered plenty of attention, few things have the ability to get consumers worked up like celebrities. Imagine, instead of owning a cartoon cat, you will soon be able to own a video clip from your favorite concert, a message from your favorite artist, or a loop of your favorite sports team doing what they do best.
Ultimately, the fact that Color Star Technology is getting involved in these tokens is creating a marriage between entertainment and art ownership. Sure, anything in a new space like this is a speculative bet, but there’s no question that CSCW may be onto something big here.
The Bottom Line
The bottom line here is simple. If you plan on investing in Color Star Technology to gain exposure to their non-fungible token portfolio, you’re making a speculative bet. However, anything in the NFT realm is a speculative bet at the moment.
While I will say that I would never buy one of these tokens, and that they are pretty difficult to understand, the high price tags they’ve attracted shows that there’s clearly a market, and I strongly believe that this market will be far more interested in the types of tokens Color Star will be creating than some heavily pixelated image of a “Punk’s” head. As such, if you’re looking to play the NFT game, you may want to seriously consider adding CSCW stock to your roster.