While cryptocurrency’s popularity has transformed the way we think of currency and the determination of value, the world is witnessing yet another evolution in the natural progression of crypto. Stablecoins – designed to account for crypto’s volatility – are one such iteration. They offer the same uses as virtual currency but are typically tied to fiat currencies or precious metals to prevent huge losses during trading. Stablecoins will not fall below their underlying asset price and given the almost inherent value of gold, gold-backed stablecoins have risen to prominence in this quickly advancing cryptosphere. 

DSCR Stock Catalysts

Here, Discovery Minerals (OTC Pink: DSCR) has entered the crypto scene thanks to its recently acquired Ruby Mine. One of California’s most well known mines, the Ruby Mine is estimated to hold 134,844 ounces of gold in the near-term and a potential 370,000 ounces of gold from beneath a buried placer. The company has commenced trenching and its operations appear to be proceeding smoothly. In April the natural resource acquisition and development company announced their venture into cryptocurrency with the planned launch of their discovery minerals coin (DSG). 

In the same vein as Asia Broadband, Inc.’s (OTC: AABB) AABB Gold token and the Perth Mint Gold Token (PMGT), the DSG would be backed by the natural resources of DSCR’s gold mine. Similarly, AABB’s gold projects are established in Mexican mining camps which generate the physical gold backing the AABB Gold Token. The Perth Mint Gold Token (PMGT) is considered the gold-standard of gold-backed crypto because it is directly backed by gold blocks from Western Australia’s Perth Mint. All three companies are making a strong assessment of the current crypto battle between Bitcoin and Ether as well as the rising value of gold. In this way, each is betting that gold-backed crypto will become the dominant model for protecting investments and facilitating sales or purchases.  

Unlike the AABB Gold token and the Perth Mint Gold Token, DSCR’s DSG coin will be tethered to 2,100 Bitcoins, 2,100 Ethers, 2,100 ounces of physical gold, as well as 2,100 ounces of physical silver. This means the DSG coin will be a stablecoin mix of crypto-backed and commodity backed assets. As a utility cryptocurrency DSCR plans to list its coin on various cryptocurrency exchanges once its 210 million coins are minted on the Ethereum blockchain. 

Working to accelerate the mining project’s progress, DSCR shared the results of its July and August geological report explaining that “Pre-development exploration will require a significant up-front cost, while the traditional small mine approach could feasibly advance exploration with gains from production”. At this time, the company prefers the traditional small mine approach and has obtained quotes for the trial seismic survey costs. While there is no estimate for drilling costs yet, it will likely cost around $300,000.  

Media Sentiment

Since DSCR shared that it is considering a joint venture proposal, investors have been brimming with speculations about who the potential partner may be. Our favorite Warren Buffet parody account, @askwarrenbuffet, hypothesized that a merger may be pending with an undisclosed NASDAQ company and predicted upcoming PR surrounding the deal back in February. We’ll be waiting along with his 35.2K followers to find out what the future holds for DSCR stock.

Technical Analysis

DSCR stock chart

DSCR stock seems to have hit its support at .0061 with a long-term support near .0059. Its immediate resistance is at .0091 with a secondary near .01. Accumulation has been building after peaking on July 28th. At the moment, the MACD is on the downside with a crossover imminent as the indicator moves up. RSI closed after market at 37.31 after hitting 31.4 only an hour before. DSCR stock is currently at a price point last seen in mid July and seems piqued to move upwards after market open. 

Despite operating at a loss and a lack of revenue, DSCR’s pivot will be moving it into an industry anticipated to accelerate in the upcoming years.  Already, crypto’s total market capitalization has grown 30-fold since the start of 2020. Although the upcoming costs associated with the mining project are substantial, the joint venture proposal being considered includes funding for the Ruby gold mine and other gold projects. 

Should you Buy?

Considering the success of commodity-backed stablecoins and the promising indications of gold reserves in the Ruby Mine, DSCR has the potential to create and market a viable cryptocoin in the near future. Because DSCR owns the mine, the company will have sole control of its assets and be able to integrate its reserves into its DGS coin without involving a third party. 

The outlook for gold has taken a hit recently thanks to the generally positive jobs report which drove up the dollar’s strength causing gold prices to fall. The yield investors receive after adjusting for inflation on a 10-Year U.S. Treasury bond, aka the real interest rate, is expected to increase depending on US monetary policy. In this case gold, an asset which does not provide dividends or income, is less attractive to investors who would be missing out on these favorable interest rates with other investments. 

Despite the recent flux in the price of gold, its value will likely rebound. However DSCR’s plans to use its gold assets in the cryptosphere is currently a wise decision which may benefit DSCR stock.


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