DigixDAO Surges While Other Cryptos Crash
DigixDAO (DGD) happens to be the only top 100 cryptos to surge while almost all others crashed. In fact, it shot up by over 75% on February 2nd. However, it is also declining sharply now. Currently, it’s trading at only $308 while having the 40th largest market capitalization among cryptos (CoinMarketCap), but had gone up as high as $440. For those who might not be aware, Digix has the distinction of successfully completing the very first crowdsale on the Ethereum blockchain. Its target of raising $5.5 million was achieved within 12 hours. Moreover, DigixDAO is also the first “Distributed Autonomous Organization” that uses the Ethereum platform.
So, what exactly is Digix? It’s considered to be a type of cryptographic asset that claims to combine the best features of cryptocurrencies with that of the safety and stability of gold. It enables the decentralized trading of gold coins without the need for an intermediary. With Digix tokens (DGX), you actually own physical gold that is reportedly stored in a vault located in Singapore. In fact, anyone who owns a DGX token also owns 1 gram of 99.9% LBMC approved gold. The company behind Digix leverages blockchain technology and smart contracts to make gold trading more efficient. Many people are supposed to be able to benefit from Digix’s gold-backed crypto. Other benefits are shared by the holders of DGD tokens, who receive a share of all the fees collected from trading and storing DGX. So, Digix happens to have two tokens, each serving a different purpose.
DigixDAO Can’t Be Purchased Only with Fiat Currency
Although it isn’t possible to purchase DigixDAO simply with US dollars, it can be acquired through Coinbase or GDAX, which deal in USD. The process works by first buying either Ethereum or Bitcoin through Coinbase/GDAX. After that, you can go over to other exchanges such as Bittrex or Binance and use your Bitcoin or Ether to buy DigixDAO.
Even though it’s complicated to buy DigixDAO, it is one of the very few cryptocurrencies that was actually gaining ground while others crashed. Maybe this has something to do with its association with gold. This is not something other cryptocurrencies can claim, and they’re crashing hard right now. This is primarily due to India recently joining other countries like China and South Korea in cracking down on cryptocurrencies, Facebook moving towards banning crypto-related ads, and giant crypto platforms like Tether and Bitfinex coming under the scrutiny of American regulators.
Nothing Is A Safe Haven
Crypto investors might feel more confident in a gold-backed digital currency right now. However, history has taught us that nothing can be considered a completely safe option. Perhaps Voltaire, the famous French philosopher and Enlightenment writer, said it best: “all fiat currencies end up returning to their intrinsic value: ZERO”. Although this is a bit of an exaggeration, it should be noted that the dollar remained stable for 179 years (1792 – 1971). However, this all came to an end when the United States cut the dollar away from gold. This move was quite controversial and it has partly been blamed for America’s $20 trillion debt.
The point is you cannot rely on any one particular asset to save you in times of financial crisis. Governments around the world are notorious for changing their monetary policies or any other kind of policy without giving everyone the proper time to act. Therefore, it would be a good idea to diversify, and not “keep all your eggs in one basket”. DigixDAO might have risen in value, but it could come down just as fast due to reasons we might not even be aware of right now. In fact, it already is coming down.