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Why the Digitalx Ltd share price rocketed 27% higher today

One of the best performers on the market today has been the Digitalx Ltd (ASX: DCC) share price.

At one stage the blockchain-based software solutions company’s shares were up as much as 27% to 21 cents.

They have since dropped back a touch and are up 9% to 18 cents at the time of writing.

Why did the Digitalx share price rocket higher?

This morning DigitalX shares returned to trade after being placed in a voluntary suspension last week pending the release of an announcement.

Well, the company ended up making two announcements this morning, both of which have gone down well with investors.

The first one was the launch of its funds management business, DigitalX Investments.

According to the release, DigitalX Investments will invest predominantly in the leading cryptocurrencies, with a smaller allocation towards special trading opportunities including ICOs.

In addition to this, the company announced a joint venture with digital media company Multiplier to launch a new crypto business news website and online cryptocurrency education platform. The two parties will each hold a 50% ownership in the venture.

Should you invest?

If cryptocurrencies storm higher in 2018 and beyond then DigitalX could prove to be an attractive way to gain exposure to the industry.

However, with the crackdown on ICO advertising expected to lead to a sharp reduction in ICOs and cryptocurrency prices continuing to come under heavy selling pressure, I’m not convinced that now is the right time to invest in DigitalX.

In light of this, I would suggest investors hold off an investment in DigitalX and keep it on their watchlist instead.

In the meantime, I think fellow small cap tech shares such as ELMO Software Ltd (ASX: ELO) and Bravura Solutions Ltd (ASX: BVS) could be better options for investors right now.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended ELMOSFTWRE FPO. The Motley Fool Australia owns shares of Bravura Solutions Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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