The value of MoneyGram International Inc. stocks rose by 155% at the start of trading on Tuesday, after associating with Ripple, the blockchain-based company. The rally is reminiscent of Q4 2017, when many low capitalization stocks got boosted in value after branding their businesses as “blockchain companies”.
The difference is that MoneyGram is an established company with more than 2,400 employees and USD 1,400 million in annual profit, not an upcoming brand or an information technology company run in a garage.
Crypto Backed International Remittance
When we consider that that the deal with Ripple was accompanied by real money ($30 million already invested, with the option to invest 20 million more) it is not surprising that investors are falling over each other as they back MoneyGram.
The investment will make Ripple the main partner for cross-border transactions with MoneyGram with a cryptocurrency backed backbone. This would reduce operational costs and working capital requirements, according to a statement released on Monday.
MoneyGram shares rose with the increase in volume, which soared more than fourteen times compared to the average daily volume of three months (1,300%), in the first ten minutes of the opening of the market.
The plans of Facebook Inc for a digital currency is also creating awareness for blockchain and cryptocurrencies on a massive scale.
The shares of the social media giant rose 1.4% after revealing details of the token which will be launched next year.
Bull Time for Crypto
Bitcoin surpassed $ 9,000 as it reached its highest level since May 2018, trading at $ 9,200 at 11:45 am in London on Tuesday.
At the same time, the prominent Bitcoin bull, Thomas Lee, said the digital currency is ready for a Fear of missing out as it rallies predicting that it could reach $ 40,000 in a few months.