The price of bitcoin continues to rise, setting a fresh record high. The price for one bitcoin is now worth more than one ounce of gold, but this is less significant than it may seem, say experts.
Gold and bitcoin prices crossed overnight. The crypto currency has set a fresh record high of $1,290.13, while a gold ounce currently trades around $1,228.
Bitcoin is a on a good run, but don't compare it to gold just yet Bitcoin is a on a good run, but don't compare it to gold just yet
Friday, 3 Mar 2017 | 8:45 AM ET | 00:52
The price of bitcoin continues to rise, setting a fresh record high. The price for one bitcoin is now worth more than one ounce of gold, but this is less significant than it may seem, say experts.
Gold and bitcoin prices crossed overnight. The crypto currency has set a fresh record high of $1,290.13, while a gold ounce currently trades around $1,228.
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Part of the reason for the switch is that gold has had a rough week. The price for the precious metal has fallen more than 2 percent this week, due to the strengthening dollar and several indications from members of the Federal Reserve hinting towards a potential interest rate hike in March.
Meanwhile, the price for the digital currency is up more than 7 percent this week. A recent regulatory clamp down by the People's Bank of Chinahas proven beneficial for bitcoin. Speculation around an imminent decision by the U.S. Securities and Exchange Commission on whether it will approve a bitcoin-based ETF (exchange traded fund) has also created heavy buying pressure.
Looking more broadly, bitcoin has enjoyed a stellar recovery over the past 12 months, climbing more than 214 percent from a low level of $407.98 last March.
In contrast, the price for gold has fallen 1 percent over the past 12 months. Gold prices fell heavily following the result of the U.S. election, but have been recovering steadily since mid-December.
However, while bitcoin prices are climbing, the digital currency has a much lower market cap compared to gold, highlights Fran Strajnar, co-founder & CEO of data and research company Brave New Coin.
"The gold supply is 180,000 tonnes of 'above ground' gold, valued at $7 trillion. The bitcoin market value is $20 billion, so gold vs bitcoin is psychological more than anything," he told CNBC via email.
"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."
The price movement is less significant than it may seem, says Adrian Ash, head of research at Bullion Vault.
