Crypto Overtake The Gold Twice. For The First Time
AnalysisBit News Today2 min read
For the first time ever, the price of a single Bitcoin surpassed the price of one troy ounce of gold, BPI data shows. The digital currency stood at $1,238.11 after starting the day at $1,230.02. While this may seem like an arbitrary milestone, it carries major psychological significance in the cryptocurrency space.
Both gold and Bitcoin are regarded by investors as safe-haven assets and hedges against conventional currencies. It also pushed the digital currency to a new all-time high over $1,270.
The latest rally for Bitcoin comes after its resurgence into 2017, spurred on by the prospects of a US regulatory approval of a bitcoin exchange-traded fund from the Winklevoss twins. Cameron and Tyler Winklevoss, widely recognized for their link to Facebook, submitted the fund proposal to the SEC nearly four years earlier. The SEC has until March 11 to make its decision, and bullish predictions are mounting.
It's not just the promise of regulatory approval. Demand for the cryptocurrency has been fueled by its increasing popularity in one of the world's largest markets: China. It's appealing partly because it's a vehicle to get around government controls on capital movement, such as those in China. Even though most trading for BTC is done there, speculation of a bitcoin ETF approval combined with generally bullish market sentiment has led traders to favor Bitcoin alongside traditional safe havens in times of geopolitical and economic uncertainty.
Back in late 2013, Bitcoin failed to hit unit-for-unit parity with the price of gold, crashing from around $1,200 at the end of 2013 to just $200 over the course of 2014. After approaching $1,200 in late 2013, the currency's value slumped so severely that two years later it was being written off as a failed experiment.
The cryptocurrency began to rebound in mid-2015 and went on to become the top-performing currency in both 2015 and 2016. Bitcoin started 2017 by topping $1,000, broke a three-year high on February 23, and surpassed $1,200 in early March.
No matter the dizzying market changes, there's still a massive gap between the overall market capitalization of Bitcoin and gold. The global gold supply is worth $7 trillion, whereas the overall market value of Bitcoin stands at about $20 billion.
