On December 21, Long Blockchain Corp. (NASDAQ:LTEA) surged as much as 500% after the company changed its name from Long Island Tea Corp. and vowed to shift its corporate focus to blockchain technology. The stock reached an all-time high of $9.49. Long Blockchain Corp. was up 11.79% at the top of the noon hour on December 28.
The stock took a major hit after a broad sell off in bitcoin and other cryptocurrencies jolted the market before the Christmas long weekend. Bitcoin, Ethereum, Litecoin, and other alternatives fell by as much as 30% on the final trading day before the break – December 22.
Blockchain is the decentralized digital ledger that enables cryptocurrencies like bitcoin. Large institutions like JP Morgan Chase & Co. and Royal Bank of Canada have started to pour resources into the technology. Although the technology is promoted for its ability to phase out the use of a central network like a bank, large institutions are interested in the technology for its potential to improve efficiency across many channels.
Long Blockchain has never turned a profit during its stint as a tea company. The cryptocurrency and blockchain frenzy has fuelled a number of upstarts that are dipping into the technology. Long Blockchain will borrow up to $4 million in order to fund its new focus in blockchain.
Experts and analysts have compared the cryptocurrency craze to the late 1990s dot com bonanza. The surge in Long Blockchain after its name change demonstrates how significant blockchain technology is for modern monetization. However, the volatile cryptocurrency market makes any of these new companies a very risky play heading into 2018.
