A fall of e-gold rates. What should the e-currency exchangers do?

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 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 didn’t believe in that bankruptcy couldn’t 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. 

Let’s try to ratiocinate why the rate started to undergo such changes. It is obvious that it took place due to the shaky  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 the 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 the rate drop was like a withering of a part of the regular profits.  

What can we expect from E-gold and what will happen to 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 which 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%, this will 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 best. Today e-gold exists only in the 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 one side is a reputation and 12 years of work and on the other is an objective reality where E-gold is just a set of working scripts of no value. 

What should the e-currency exchangers do?

From the economic point of view, the 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 perform CPR on a dying person.  

One of the strategies for the today’s 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 sounds 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 it’s better to earn on the more liquid currencies than to deal with E-gold. Many people consider that it’s better to have a null account than to risk your funds.