EGOLD A FALL OF EGOLD RATES

Updated: 07/14/2008 00:00
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The information about the bankruptcy of Egold had swept like a whirlwind throughout the world and touched all the fields of the virtual economy.

The information about the bankruptcy of E-gold had swept like a whirlwind throughout the world and touched all the fields of the virtual economy. At first the e-gold market was in a silent abeyance without any possibilities to know understand whether this information was true. However in a few hours an exchange market started to sink in panic moods. In 8-10 hours after the release about the bankruptcy the rate of E-gold ? WMZ was over 0,7 mark. Forums have also contributed their mite to the process of panic unload of E-gold to the exchangers. Interestingly enough but even a great number of people who didnt believe in that bankruptcy couldnt save the situation. In a day after the news about the bankruptcy of e-gold the exchangers witnessed a mass unload of the currency. The first exchanger that has fixed the rate at 40% for the exchange wmz ? e-gold was Autocambist that later has completely got rid of E-Gold in its balances.

Approximately in 30-35 hours a panic on the market has started. The exchangers started selling each other E-gold, probably, dreaming of getting rid of their balances. So, for example such well-known exchangers as SuperChange, RoboxChange, Megaexchange had got rid of their balances by the moment when e-gold was accepted at 45%.

However the lowest mark was established by Exchengine, which was offering only 42,6 E-gold for 100 WMZ. Few days ago nobody could even dream of such turn of events but today it is a reality.

Lets try to ratiocinate why the rate started to undergo such changes. It is obvious that it took place due to the shaky the general situation and the position of the system on the market. We can say with confidence that if instead of e-gold the fraudsters have mentioned WebMoney, for instance, the rate would change maximum by 1%. As to E-gold a minor announcement of system bankruptcy from the unverified source resulted in rate drop. The numerous actions, waiver of in- and outexchange with wire have weaken the trust of the users in the system. In other words, people were instinctively expecting the bankruptcy of the system. And many people were ready to refuse the system. However, the market of E-gold was held by the exchange services for which a rate drop was like a withering of a part of the regular profits.

What can we wait from E-gold and what will be with the rate?

After a rapid fall of the rate to 40%-50% mark an interesting economic situation took place. E-gold currency has concentrated in some automatic exchangers that have strongly increased their balances of E-gold. Interestingly enough but the unload of E-gold to these exchangers was made at 35-40%. Here we can draw a conclusion that the exchangers will have to speculate on exchange operations in the range of 40-50% that automatically guarantee the rate fixing at 40%-50%.

As for the further fate of E-gold we can safely say that this e-currency has approached the rate that suits it mostly. Today e-gold exists only in virtual reality and hence it cannot compete in liquidity with cash or with any other e-currencies in 1:1 ratio.

In any way today E-gold reminds the scales on the one hand of which is a reputation and 12 years of work and on another is an objective reality where E-gold is just a set of the working scripts of no value.

What should the e-currency exchangers do?
From the economic point of view e-gold rate can reanimate only after the loud and encouraging statements of E-gold. At the moment there are no such statements, and we can expect that the exchange services will try to increase the price, strengthen the cheapening e-gold currency, however all these actions will be like an effort to make an artificial respiration to the dying man.

One of the strategies for the todays exchangers can be an e-gold trade based on difference of the rates ranging 40%-50%. But here one should remember one thing: the cheaper selling price of e-gold is the more profits you get from the difference. Thus, may be it sound terrific but the decrease of price for e-gold purchasing can bring the further profits.

However the most beneficial strategy is a strategy of retention. Lots of people already follow this business course and unload E-gold without waiting for the e-gold price fall. The thing is that today its better to earn on the more liquid currencies than to deal with E-gold. Many people consider that its better to have a null account than to risk your funds.


About the author

Nicole Berger has over seven years experience writing and editing for online and print media. She has held various editor and associate editor positions in some of forefront independent media publications. A consistently dependable team player, I thrive in a high-pressure environment, enjoy the challenges of meeting deadlines and managing a team, and am comfortable researching, writing and editing on a wide range of topics.
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