ZenGold, Bitcoin and Ethereum Volatility Explained
ZenGold, Bitcoin and Ethereum Volatility Explained by Rory, The Daily Coin
Friday May 26, 2017 ZenGold launched a cryptocurrency backed by physical gold. Bitcoin and Etherum cryptocurrencies began moving violently in the market place on Friday May 26. ZenGold accepts Bitcoin and Ethereum as currency for the “tokens” of ZenGold.
Ken Schortgen, The Daily Economist, described the recent upside explosions in Bitcoin and Ethereum as coming from Asia, primarily South Korea and Japan.
“Arbitrage between the fiat pairs drags markets up or down in line with leading markets. At present, volumes on the KRW and JPY pairs dominate trading with a combined 48 percent market share.” Source
Would it make sense the drop in both Bitcoin and Ethereum as being related to people moving their cryptocurrencies into ZenGold? Asians love gold and with a gold backed cryptocurrency coming online that accepts the two most popular cryptocurrencies it makes sense to me that some of what we have seen over the past 48 hours is directly related to the launch of ZenGold. I’m not saying this accounts for all the volatility, but is most certainly could account for a significant percentage.
ZenGold stated there would be a total 100 million tokens ever created with only 63 million coming to market. Each token represents one gram of physical gold and I believe the initial ICO (Initial Coin Offering) started at $30 (equivalent) per token. If you owned 1.5 bitcoins and another 20 ethereum coins and you had the opportunity to trade some of this new found wealth for physical gold, with no premium, why wouldn’t you do that?
Is this part of the volatility we have seen over the past two days in these two cryptocurrencies? Make sense to me, especially in light of the bounce back in both BTC and ETH. Both have drifted a little lower, but both of these cryptocurrencies are still up week-over-week. We can’t even talk about year over year as both of these crypto’s have done a moon-shot over the past year, heck, over the past month, so we’ll stick with week over week for now!!
Anyway, just wanted to get this on the table as most people seemed to have overlooked this simple truth and possibly the one of the driving forces of what we have witnessed. You heard it here first!