A number of companies specializing in selling, buying, managing or mining gold, with a combined market cap of billions, have recently announced their expansion into the Bitcoin arena through mining, selling, storing or accepting bitcoins for gold.
Netagio, founded by GoldMoney which specializes in selling and storing gold with a market cap of approximately two billion dollars, today announced its launch of a new three-way exchange of bitcoin to gold to pounds, allowing users to buy, sell or store either of the three assets or interchange them in a peer to peer exchange. The British based company will focus on providing retailer customers and industrial investors with a robust bitcoin exchange, offering them a very high level of trading security and military guarded bitcoin and gold storage. In a press release today Netagio’s CEO, Simon Hamblin, explained:
“We have been encouraged by the early and increasing appetite from retail customers and institutional investors. From our conversations, they clearly want to take advantage of the opportunities available from being able to trade between the asset classes on a single continuous exchange, any time of day or night. Concerned about the speed, cost and security implications of sending their transactions abroad, customers clearly wanted a British-based banking relationship, which we can now offer.”
DNA Precious Metals Inc., a company which focuses on gold and silver mining, recently announced the formation of a wholly owned subsidiary called DNA Crypto Corp. which will focus on identifying the best crypto currency mining opportunities in the US and Canada and will start by mining bitcoins. James Chandik, CEO and President of DNA Precious Metals Inc., again emphasised high interest from investors in press release comments:
“The management of DNA Precious Metals, Inc. was approached by some crypto currency miners recently and they presented us with an opportunity that we did not want to pass up. They proposed that we should become part of the bitcoin mining industry, and we saw the potential to deliver value for our shareholders as we continue to work towards bringing our mining operations on the Montauban Mine Property into production.”
Another notable company is Grand Pacaraima Gold Corp, which used to focus on mining precious metals. It recently changed its stock market ticker to First Bitcoin Capital Corp, leading to a complete change of its business market. It now invests in bitcoin companies, specifically bitcoin mining and exchanges as well as investing in bitcoin directly by providing liquidity to exchanges.
More famously, the outspoken bitcoin critic Peter Schiff recently soften his stance, and completely uturned on his previous statements by recently announcing that Euro Pacific Precious Metals, a company for which Peter Schiff is a major investor, was now to accept bitcoins as a means of payment. While Agora Commodities, a company which specializes in selling precious metals, recently announced that it had sold $10 million dollars worth of gold and silver in bitcoins. Finally, showing the turning opinion of gold companies towards Bitcoin, a gold investor recently decided to ditch his gold mine completely in return for bitcoins.
Bitcoin shares a number of features with gold. They both are limited in nature, they both are created by a process of “mining,” they both are deflationary and they both are primarily valued for their ability to function as a means of exchanging wealth. It is, therefore, no surprise that gold and silver mining companies, recognizing that gold and bitcoin have much in common, are utilizing their special skills and applying them to Bitcoin.
The gold market is currently valued at approximately $7 trillion while the value of the total number of Bitcoin ever mined currently stands at approximately $8 billion, making up just above 0.1% of the gold market. Gold has experienced a huge increase in price since the meltdown in 2008, but following the economic recovery, prices now seem to be stabilizing and even falling. Bitcoin prices have also recently stabilized at approximately $600, following an all time high in November 2013, when, for the first time, the price of a Bitcoin surpassed the price of an ounce of gold, drawing the attention of gold companies and the general public.
Considering the similarities between gold and Bitcoin, many expect Bitcoin and other cryptocurrencies to take some of the market share of gold and other precious metals due to its superiority in ease of transport and a more convenient means of transfer. This new rush of gold companies into Bitcoin seems to validate these views. Leading to more professional companies taking over less secure, less organized, and worse managed bitcoin companies that dominated the early years of Bitcoin, paving the way for institutional and retail investors, as well as enticing further the ordinary man, to invest in Bitcoin.
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