The bitcoin gold price crashed by 62% following its first official day of trading, despite the fact that no exchanges have enabled deposits.
What’s bitcoin gold, exactly?
Bitcoin gold supposedly improves on both bitcoin and bitcoin cash, as it uses a different algorithm to create, or “mine,” new coins by anyone with a personal computer, Mashable reported. While the original bitcoin could be mined on any computer as well, large mining companies using specialized machines known as ASICs (meaning application-specific integrated circuits) currently dominate the bitcoin network. Bitcoin gold’s aim is, in short “to bring bitcoin mining back to the ‘people,’” according to the roadmap.
As CWN has reported, bitcoin gold (BTG) is an altcoin that — like bitcoin cash — will have a shared blockchain history with bitcoin at the time of its release. Bitcoin gold’s developers took a “blockchain snapshot” on Tuesday morning at block 491,407, freezing the balances that bitcoin users will have in their corresponding bitcoin gold wallets following the release of the Bitcoin Gold mainnet. In the meantime, the developers are premining approximately 100,000 coins that they say will be used to help fund the growth of the coin’s ecosystem.
Although the Bitcoin Gold network has not officially launched, several major exchanges — including Bitfinex and HitBTC — have credited their users with BTG balances and added trading pairs, although they cannot enable deposits or withdrawals until after the mainnet is stable.
Bitcoin gold has not fared well during its first day-and-a-half on the exchanges. When the order books opened, the bitcoin gold price was hovering near the $500 level. Over the next 16 hours, the bitcoin gold price shed about $100 dollars, but on Tuesday at 14:00 UTC it began to crash. By 15:30, the bitcoin gold price had plunged to $275, and it continued to decline from there, eventually reaching a point of relative stability between $140 and $150. At present, the bitcoin gold price is $144, which represents a 24-hour decline of 62%.
Although trading access is limited, 24-hour BTG volume is $24 million, which places it within the top 15 most-traded cryptocurrencies, according to data from CoinMarketCap. The vast majority of this trading is concentrated on Bitfinex and HitBTC, and the price varies drastically between those exchanges. On Bitfinex, for instance, bitcoin gold is trading below $120, but HitBTC values it at $198. YoBit prices it as high as $242, although this exchange only accounts for about 5% of BTG’s total volume.
It is far too early to extrapolate the success or failure of Bitcoin Gold based on these early statistics, but many bitcoin holders — most of whom do not keep their coins on exchanges — intend to sell their coins as soon as they are able to access them, so it does not bode well for the coin’s short-term prospects that it is trading so low before deposits have even been enabled.