Volatility in the price of bitcoin gold (BTG) has increased in the past month, as the coin spiked in late August, slipped lower and then began to move higher in recent days.
Bitcoin gold is among the cryptocurrencies that have turned higher after the markets bottomed out in July, and are now looking to surpass previous all-time highs.
But first, what is BTG? How does it differ from bitcoin (BTC) in its development? You may have heard of the altcoin, but not be aware of the details of the protocol.
In this bitcoin gold analysis, we provide an overview of the cryptocurrency, its protocol and the long-term outlook for the price.
What is Bitcoin Gold? How is it different from Bitcoin?
Bitcoin Gold is a hard fork, or split, from the Bitcoin blockchain that took place in October 2017, following the previous hard fork that created bitcoin cash (BCH) in August 2017. A hard fork is when a single cryptocurrency splits in two, meaning there is now an alternative cryptocurrency to the one it split from. These changes are also seen in the resulting crypto’s protocol.
When it comes to the protocols, what is the difference between Bitcoin Gold and Bitcoin Cash? The focus of the hard fork that created Bitcoin Cash was to increase the size of each block on the blockchain to enable more daily transactions. However, Bitcoin Gold was created as an open-source protocol to decentralise mining of the cryptocurrency back to regular computers, as bitcoin mining became increasingly centralised among large miners with costly processing equipment.
Unlike Bitcoin and Bitcoin Cash, Bitcoin Gold uses the Equihash proof-of-work (PoW) algorithm, which allows miners to mine coins efficiently using common graphics processing units (GPUs) instead of relying on the more costly and specialty application-specific integrated circuits (ASICs). Bitcoin Gold offers miners who are unable to buy expensive equipment an opportunity to get back into coin mining. The algorithm aims to address the scalability issues that can affect the use of the Bitcoin blockchain.
Like the original bitcoin (BTC) cryptocurrency token, the bitcoin gold (BTG) token has a maximum supply of 21 million coins. There are currently 17.5 million coins in circulation, for a total market capitalisation of $1.2bn that ranks it as the 91st largest cryptocurrency.
Over time, the developers have shifted their focus for the evolution of the Bitcoin Gold blockchain:
The roadmap for this year focuses on four areas: interoperability with other blockchains; shifting from board-based governance to a decentralised autonomous organisation (DAO) model; infrastructure updates; and establishing a robust and effective lightning network to run on the blockchain. A lightning network is a second-layer technology applied to Bitcoin that uses micropayment channels to scale its blockchain's capability, essentially allowing participants to transfer bitcoins between one another without any fees using their digital wallets.
As a step in the development of interoperability, in May, Bitcoin Gold announced a partnership with Phala Network to create low-cost, trustless cross-chain bridges to the Polkdot blockchain for BTG and other Bitcoin-based blockchains. Blockchains are designed to be “trustless”, which means they operate through consensus, rather than having to trust a single organisation or third party to work.
The bridges, which will leverage Phala’s confidential computing technology, will first link BTG to the Polkadot ecosystem, but are also being built so that they can work with any other tokens that run on blockchains based on bitcoin’s underlying technology, which includes litecoin (LTC), bitcoin cash, dogecoin (DOGE) and bitcoin SV (BSV).
The announcement said:
Hang Yin, who is a co-founder and the chief scientist behind the Phala Network, is also the lead developer and a co-founder of Bitcoin Gold. He was joined by five other co-founders – Martin Kuzandzhiev, Franco Niebles, Alejandro Regojo, Robert Kuhne and Jack Liao – although the latter three are now inactive, according to Bitcoin Gold’s website.
BTG price seeks direction
The bitcoin gold price chart shows that the coin, like many other cryptocurrencies, has been trending higher since 20 July. The BTG price rose from an intraday low of $34.27 on 20 July to reach a high of $79.09 on 21 August.
The coin then dropped back to $61.78 on 27 August, spiked to a three-month high of $94.49 on 29 August and subsequently retreated to $61.85 on 8 September. It has since been unable to hold above the $70 level.
The price of bitcoin was up by 1.55% in the past week, but bitcoin gold was trading down by 2.55% at the time of writing. Even at a peak of $168.19 on 6 May, BTG was well below the all-time intraday high of $539.72 seen not long after the coin launched in October 2017 during the previous cryptocurrency rally.
What’s next for the bitcoin alternative? Can the price rebound, or is it time to short the altcoin?
Bitcoin gold price prediction: will the price set new highs in the future?
The BTG price prediction from WalletInvestor sees the coin trading above $73 in October, then falling back to the $64 level in November before rallying in December to end the year at $102.80.
Over the long term, it predicts the price will climb to $169.82 by the end of 2022, and more than double to $368.96 by the end of 2025, with the five-year forecast at $398.04 in 2026.
The bitcoin gold prediction from DigitalCoin is less bullish, predicting the price will rise to an average of $116.09 in 2022 from $99.64 in 2021, then average $202.74 in 2025. It projects the price will average $306.78 in 2028, with a high of $327.06.
The bitcoin gold price forecast from Price Prediction, however, projects that the coin will average $367.33 in 2025 and continue to double every two years to reach an average of $2,310.41 by 2030.
It’s important to keep in mind that cryptocurrency markets remain extremely volatile, making it difficult to accurately predict what a coin’s price will be in a few hours, let alone to give accurate long-term estimates. As such, analysts and online forecasting sites can get their predictions wrong.
We recommend that you always do your own research, and consider the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decisions. And never invest more than you can afford to lose.
How to buy BTG coins in 2021
Are you interested in investing in bitcoin gold? You can buy BTG on cryptocurrency exchanges such as Binance, HitBTC, Gate, Huobi Global and Bitfinex. You can then withdraw the coins to a secure software or hardware wallet for safekeeping.
Trading CFDs offers the opportunity to try to benefit from both bullish and bearish price action. If you expect the BTG price to rise, you can open a long position; if you think it will drop, you can open a short position, still making a profit if the price moves lower.
As a leveraged product, CFDs are designed to maximise gains, which can be large on volatile products such as cryptocurrencies. However, you should be aware that using leverage also increases the size of the loss if the price moves against your position.
Make sure you understand how CFDs work and do your own research before you begin, and never invest money you cannot afford to lose. Learn more about cryptocurrency CFDs with our comprehensive guide. Create an account on Capital.com to stay on top of the latest BTG coin news, price analysis and forecasts, and start trading the coin today.
Edited by Valerie Medleva
Cryptocurrencies are highly volatile investments, making them riskier to invest in than other asset classes. Whether BTG is a good fit for your investment portfolio depends on your risk tolerance and personal goals. You should do your own research and evaluate the level of risk you are prepared to accept before investing.
The BTG price level will depend on the adoption of the cryptocurrency as well as the direction of the broader markets.
While price forecasters predict that the bitcoin gold price will rise over the long term, it’s important to keep in mind that they can and do get their estimates wrong.
The Price Prediction website suggests that BTG could surpass $2,000 by 2030.