Shares of BitGold Tank 31% in 4 Days, Threaten All-Time Lows

Shares of BitGold (CVE:XAU) are now challenging their lowest levels since going public 4 months ago.

Shares of BitGold (CVE:XAU), recently rebranded as GoldMoney following its merger with the UK-based precious metals storage firm, are now challenging their lowest levels since going public 4 months ago.

The shares, publicly traded on the TSX Venture Exchange, have melted today to as low as C$2.95, a decline of 13% and bringing total losses to 31% this week. This, despite relatively decent performance in the price of gold, which the startup promotes as a stable store of value and ideal medium for spending. Gold rose by as much as 2% today, and gold stocks have gained roughly 10%.

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Shares have since recovered to C$3.15 in volatile trade. They are threatening their lowest levels since debuting as a publicly traded company after entering into a reverse takeover with Loma Vista Capital Inc. in May.

Critics have argued that BitGold is overhyped and its shares are in a bubble. XAU nearly tripled in value to C$8.00 within days of launching, implying a market capitalization of nearly C$300 million.

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The startup’s stated objective is to make it easy to store and spend gold. As implied by its original name, it may have employed some use of blockchain technology to carry out transfers. However, it minimized its association with anything to do with Bitcoin from the start, and now makes practically no mention of it whatsoever.

Instead, it has focused entirely on the precious metal it promotes, as observed with its takeover of GoldMoney. Judging by the quick succession of its funding, launch and debut on the public markets, it is likely that its whole raison d’être was for the takeover of a large precious metals custodian, perhaps to make it publicly accessible to investors or infuse it with user-friendly web technology.

In a bid to attract clientele, BitGold has been offering a welcome bonus of free gold to new users.

During the most recent fiscal quarter, the company reported a net loss of $2.86 million.

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