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Bitcoin, Gold Prices: Digital Currency Surpasses Precious Metal

Image: Bitcoin, Gold Prices: Digital Currency Surpasses Precious Metal

The price of a bitcoin surpassed that of an ounce of gold this week. (Colicaranica/Dreamstime.com)

By    |   Friday, 03 Mar 2017 12:45 PM

The price of a bitcoin has surpassed the price of one ounce of gold for first time ever.

The digital currency's price reached more than $1,290 per unit on Friday, which exceeded an ounce of gold that could be purchased for $1,228, according to CNN Money.

Gold and bitcoin are both viewed as safe havens to many people, especially in rough economic times, but the two still have significant differences, as gold has been around for years, whereas bitcoin is new to the market, having only been around since 2009.

“The truth is that bitcoin is its own asset class in its own right and does fare well in times of uncertainty,” Charles Hayter, CEO of CryptoCompare, said, according to CNN Money.

Bitcoin's current value has a lot to do with the payment system being in high demand in China right now, according to BBC News.

According to authorities, bitcoin is being used in China as a way to channel money out of the country. Authorities announced closer scrutiny of bitcoin trading earlier this year after they found that money was being illegally transferred, BBC reported, adding that the move caused a temporary drop in the price of the crypto currency.

Bitcoin's value didn’t take much of a hit though. The price has increased 214 percent from a low level of $407.98 last March, CNBC reported.

Despite the surge, Fran Strajnar, the co-founder and CEO of Brave New Coin, said the market cap for bitcoins digital currency doesn’t compare to gold, CNBC noted.

“The gold supply is 180,000 tons of ‘above ground’ gold, valued at $7 trillion. The bitcoin market value is $20 billion, so gold vs bitcoin is psychological more than anything,” Strajnar said, according to CNBC.

“The comparison is perhaps a positive signal that bitcoin is being commoditized. But bitcoin is not a commodity, while gold has been a commodity for thousands of years,” he added.

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The price of a bitcoin has surpassed the price of one ounce of gold for first time ever.
bitcoin, gold, prices, currency
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2017-45-03
Friday, 03 Mar 2017 12:45 PM
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