DigixDAO: Investors Flee to Gold-Backed Coin

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DigixDAO: Investors Flee to Gold-Backed Coin

 February 2, 2018

The once-obscure cryptocurrency DigixDAO (DGD) backed on gold, has rocketed in value since Thursday as investors scurry to shelter with cryptocurrencies across the board bomb in value.

In the last 24 hours, the cryptocurrency market has been devalued by $100bn as concerns over regulation and price manipulation on the major exchange, Bitfinex, started a rout on Thursday morning. This has been reflected in major cryptocurrencies, like bitcoin, ethereum and ripple tanking in price.

However, as the market route began DGD was the only coin out of the top 100 coins to actually increase in value. On Thursday afternoon, DGD reached a record high of $295.39 and by Friday morning the coin was trading at highs of $433.72, a 54% increase compared to the coin’s value at the beginning of Wednesday.

On its website, Digix is referred to as “Ethereum’s first major Distributed Autonomous Organisation”. It is a gold-based lending platform that uses two tokens, the DAO and the DGX. The DGX token represents one gram of London Bullion Market Association (LBMA) standard gold with DAO tokens giving the holder voting and owning rights in Digix. DGD owners can also claim fees earned from the DGX token

There are two million units of DGD in circulation- meaning that a total market cap on Friday morning was $867,444,000. The currency has been heavily traded by investors. In the past 24 hours, $62m worth of the coin has been traded on exchanges.

Being based on gold gives the Digix tokens a stable value and minimises the wild volatility which characterises other cryptos. It effectively tokenises gold and its inherent stability has probably attracted investors concerned over the state of other coins.

Digix’s ICO took place in March 2016 and hit the 5.5m target within a space of 12 hours.

Many of the other coins have fallen by as much as 30%. On Thursday evening, bitcoin fell below the $8,000 mark, the first time since the 25th of November, before bitcoin value soared. By mid-December, the coin was trading at nearly $20,000 and even at the beginning of January, was still at just under $15,000. An estimated $44bn was wiped off the value of the currency following the slide in January.

https://themarketmogul.com/digixdao-gold-backed-coin/