Digital Gold Token DGX Listed on BitGo

[Mercury]

Digix’s DGX, a gold-backed coin with a modest market capitalization and a 24-hour volume of under $1 million, is about to be put to the test on BitGo’s enterprise custodial services platform in a new listing announced on Monday.

“Having this integration places DGX on an industry-recognized platform and would be a springboard for DGX to be listed on other major exchanges as we head into Q4 2018,” Digix said in its announcement on Medium.

DGX is an ERC20 coin backed by 99.99% gold bullion from the London Bullion Market, one of the most prestigious institutions for the OTC purchase and sale of the precious metal.

Details on the supply auditing process are scarce, but the company’s site puts a token at the same price as one gram of gold, effectively making it “the Tether of gold.”

There appears to be a premium on DGX not accounted for, as a look at the price of gold from London’s bullion vault shows $39.53 per gram at the time of writing. Meanwhile, one DGX token costs upward of $42, and the price fluctuations suggest forces other than Bitcoin’s value are at work.

Of note is a spike on Monday occurring shortly after the announcement that pushed DGX’s price up to $48. A subsequent correction brought it down to between $3 and $4 above the price of one gram of gold.

Data from Galmarley shows that the coin attempts to make corrections where necessary to keep its price around its target value.

Demand for gold-backed cryptocurrencies could rise as investors and traders seek respite from volatility. These are non-inflationary assets that make gold accessible in a digital form wherever people have difficulty accessing the physical commodity.

After the failure of the Royal Mint with its digital gold project, DGX could emerge as a popular alternative to Bitcoin, which currently carries the title of “digital gold” despite its propensity for volatility.

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