The cryptocurrency is 8-years-old, but it already managed to surpass an ounce of gold in value. Bitcoin price is enjoying one new record after another. On the other hand, experts are not so excited about this event. They believe that it is just an ephemeral trend, while gold will remain a steady and important element within any economy. Whenever hard times are coming, people are storing their assets in the form of gold to face inflation or other such disruptors.
In an overnight fight, gold and bitcoin crossed their paths for the first time. The outcome was that the cryptocurrency managed to surpass the worth of the most valuable metal on the market. Bitcoin price rose to $1,290.13, while a gold ounce reached a value of $1,228. While the digital currency had indeed a good period of time, the main reason behind this odd turn of events is the weak performance of gold.
This week only, the value of the precious metal fell by 2%. The causes were a stronger dollar together with the suggestions of the officials from the Federal Reserve that the interest rate has high chances to skyrocket this March. At the same time, the Bitcoin price experienced a surge of 7% during this same week. The cryptocurrency took advantage of recent rumors according to which the U.S. Securities and Exchange Commission might consider the bitcoin as an exchange traded fund.
Last March, the Bitcoin price was 214% lower than today. Thus, the evolution of the digital world did not happen in the span of a week, but it took 12 months to reach stellar heights. Despite this news, the co-founder of data and research firm Brave New Coin, Fran Strajnar, is not impressed by the evolution of the digital currency. On the contrary, he pointed out the fact that Bitcoin didn’t surpass gold as far as the market capitalization is concerned. According to him, the gold supply is valued at $7 trillion while the bitcoin is positioned as a much lower currency tier with a worth of only $20 billion.
The director of research at Bullion Vault, Adrian Ash, applauded the way Bitcoin managed to surpass expectations. However, exceeding an ounce of gold in value is not actually an impressive achievement. He explained the rise of the digital currency as a growing interest in secondary assets and as the finding of a new group of buyers that are most likely imprudent in their financial decisions.
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