Based on Bloomberg data, one unit of the digital currency Bitcoin is now worth more than one ounce of gold for the first time. The digital currency is often considered a new kind of currency and though both gold and bitcoin are thought of as alternative assets, they do not normally trade in correlation. However, it is still noteworthy to acknowledge its rise above the price of gold.
The cryptocurrency closed on Thursday at $1,268 while an ounce of gold stood at $1,233. Although the swap could be attributed to a bad gold day and a good bitcoin day, bitcoin has still more than doubled within a year up 185% compared to last year. Gold, on the other hand, has stayed stagnant trading at exactly the same price as a year ago.
This current bitcoin rise has been attributed to the rising outflow of it in China via local exchanges. Word is also spreading that Mexico along with Greece, Italy and France are active as well. This along with the renewed interest for blockchain has helped to incite interest in the virtual currency.
The US Securities and Exchange Commission is also expected to rule on a proposal by March 11 to introduce an exchange-traded fund based on the digital currency.
Back in 2014, Bitcoin’s value plummeted after the largest exchange collapse. This month’s surge is a huge reversal of that performance. Since its launch back in 2009, there has been uncertainty about the currency with experts questioning its future.
However, this recent price switch could be considered a sign that more mainstream investors seem to be appropriating some portion of their alternative investment portfolio to bitcoin.
Eric Benz, Managing Director at Cryptopay who has been confirmed to be a speaker at SiGMA 17 conferences on Payments, had this to say: “This is the beginning of a much more pragmatic and nuanced strategy towards our understanding of money and a drastic move away from the previous bashing and skepticism generated by bitcoin in its early days. In the famous words of the great Frank Sinatra; ‘The best is yet to come”