BitGold has taken on the name of its recently acquired subsidiary, UK-based GoldMoney.
BitGold seeks to use the blockchain to make gold more easily transactable, offering clients the ability to buy/sell gold, spend it and accept it for payment.
The startup acquired GoldMoney for CAD $51.9 million ($42 million) two months ago. GoldMoney is one of the largest precious metals storage firms in the UK, stating to hold $1.2 billion worth of precious metals on behalf of clients.
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It was assessed that the acquisition of GoldMoney was likely an essential part of its growth strategy from the outset. The acquisition of a large, established player was possibly the raison d’être for early investors to pump assets into the startup. GoldMoney has a large client base already generating millions in annual profit, while BitGold brings its technology and a robust platform to the table.
Furthermore, it is possible that part of the strategy all along was to bring GoldMoney into the publicly traded sphere. In January, BitGold entered into a reverse merger agreement with Loma Vista Capital Inc, a publicly traded shell company previously engaged in mineral exploration. At the time, BitGold was still in private beta mode.
The rebranding may thus be the final touches on these plans. It is also noteworthy in emphasizing BitGold’s ambition to brand itself based on gold and less on Bitcoin. The startup’s website, like many in the gold industry, goes to great lengths lauding gold’s properties and making the case for its economic value. But there is practically no mention of Bitcoin or the underlying blockchain technology.
Shares of the startup will continue to be traded under the symbol XAU on the TSX Venture Exchange. The shares are currently trading at $5.50, making for a market capitalization of $201 million. Some have alleged that the company’s shares are grossly overpriced relative to its current ability to generate earnings, but this may change with GoldMoney in the picture.
The latest move happens to come at a time of gold prices falling to their lowest levels in over five years, and gold bears openly questioning the metal’s true potential as a store of value.