Do you take Bitgold?
I’m impressed by Bitgold (XAU). The company’s senior management and the terrific job of setting up an electronic payment platform that is backed by actual physical gold. Yes you are buying gold at the spot price or selling gold at the spot price to anyone in the world. After only week they made a big acquisition the purchase of GoldMoney.com (GM), a company founded by James Turk, for C$50M in XAU shares. GM was originally created to do what BitGold is planning to do, provide a cost-effective way for everyday people to buy, hold and sell gold.
The GM acquisition allowed them an established relationship of trust with an entry into the US market. That isn’t where this is going to be making the largest impact though. Countries like Venezuela, Russia and possibly Greece have or are going to see huge swings in the value of their currency towards trading in the US dollars. It already has been reported by Barclays PLC that the Venezuelan dollar has been devalued at least 61% in the last year. Had they backed their bank savings in bitgold they would still have gold and in fact overnight they would have 61% buying power over their current regular bank accounts country mates.
The more and more I read into this company the more and more I fall in love with the concept. The first press release announcing the acquisition of GM issued prior to the start of trading halted XAU on the TSX Venture for pending more news or more details of what it was buying.
GM’s 135,000 current users will add to the 50,000 new bitgold clients and can be significantly more profitable as part of BitGold than they were as part of GM. Big-name investors with deep pockets have taken significant BitGold positions this stock rocketed up from C$0.90 a share to a high of $8.00. I could be wrong, but I think the bought deal announced Friday at $3.65 being a discount of $.0.45 or 10.9% shows the bottom. I doubt that they are interested in selling near the current price so this could help move the stock price north towards their consensus fair value over $5.10.
I am now pro BitGold stock . In fact I am very much for it as I see this business succeeding because it is a great product and will make gold more accessible worldwide. This means there is also a very good chance that BitGold will grow its international customer base into the millions reviling PayPal.
No one knows the future but you don’t need a crystal ball to see this will go up in value. As clients are added how high it rises will depend on the intrinsic value traders put on the trading platform and the revenue it brings……Stay tuned returns to $4.50 next week.
