Overstock’s CEO said he’s targeting a future where his company could become a legitimate rival to Coinbase (NASDAQ:COIN). Given all the excitement around Coinbase right now and around cryptocurrencies in general, this is a bold statement. Indeed, if Overstock is able to continue on its transition toward being a crypto play, this stock could see some pretty significant momentum from here.
However, today, Overstock is down approximately 3%. It appears some level of fatigue is setting in among crypto investors of late, as the bull rally in these digital tokens has taken off in epic style this year.
Let’s dive into what these comments were, and why some investors are getting excited about the news.
Could OSTK Stock Really Become the Next Coinbase?
Overstock’s CEO believes the company’s tZero platform could become the “holy grail” of trading platforms for investors. He described this platform as a “digital wallet that lets people hold and trade crypto, NFTs (nonfungible tokens), stocks, and digitized securities.”
The company’s tZero platform is similar to other platforms in that it utilizes distributed-ledger technology supporting various cryptocurrency options. However, Overstock’s aim with tZero is to provide a secondary trading platform for pre-IPO companies. This platform would be a smaller, niche offering for crypto enthusiasts. However, seeing how various early stage cryptocurrencies have performed of late, the company hopes this opportunity will be as lucrative as its sounds.
Given the rise in popularity of not only cryptocurrencies but also NFTs, this could indeed be a game changer for investors in these digital assets. The hope among many Overstock investors is that the company can continue to leverage the momentum in this space over the long term.
That is, if momentum continues.
Given the highly speculative state of the cryptocurrency space today, risks remain high. These digital assets are ones that have vastly outperformed the market this year. Accordingly, it’s unsurprising to many investors that OSTK has followed suit. Shares of Overstock are up more than 30% year-to-date.
However, given the speculative nature of this sector and the stocks supporting cryptocurrencies, I’d caution investors to be prudent with portfolio allocation for such positions.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.