It has finally happened. The value of a single Bitcoin has overtaken a troy ounce of gold. On March 2nd 2017, an ounce of gold closed the market at $1233. Bitcoin’s average for the day was trading well north of that, at $1268. Bitcoin shows no sign of slowing down right now either. Yesterday’s price was no fluke, as the coin continues to enjoy a rather large margin over the price of gold today as well. This news even has larger networks covering this milestone, as the BBC even published an article on it.
Of course, this has to be taken with a grain of salt as well. Bitcoin’s volatility is both the force that championed the coins value to this historic milestone, but also the culprit which threatens crashes in price again. I’m no statistician, but am a history junkie. Bitcoin’s young history is fraught with spikes and crashes. Even the most precursory glance at a chart of its entire price history reveals the drastic ebb and flow of the coin. From literal cents around its launch in 2009 to the all time high we see now, Bitcoin has seen exponential growth but also its fair share of crashes and scares. But what does this new high price mean and how does its history play into where it’s headed?
So does this mean that Bitcoin is the new gold? It has a finite supply like gold. Its basic properties are extremely useful outside of only monetary means such as blockchain technology and a renewal in the decentralized spirit. It can be traded and stored for its inherent monetary value like gold. However, I do not think it is the “new” gold, nor do I think that gold will be supplanted by Bitcoin or any other digital currency anytime soon, regardless of how similar the two may be.
Put simply despite all of these similarities, Bitcoin’s volatility is currently too large to rectify and even begin approaching gold as a portfolio’s favorite reserve position. This is not to say that gold has not experienced lows and highs, but investors like gold because the likelihood of gold’s price changing significantly is much lower than that of cryptocurrency.
This is one of the main attractive features of gold. It is a good way to store wealth, particularly in the face of uncertain international markets when fiat currencies are less solid. Bitcoin’s high volatility may be one of the larger barriers to transcending gold entirely. Furthermore, just because Bitcoin’s price past gold’s doesn’t mean Bitcoin is worth more than gold. In fact, in order to match gold’s market cap of $7 trillion, a single Bitcoin needs to be worth around $500,000.
That being said, Bitcoin, its community, its developers, and its investors should be immensely proud of the coin breaking past gold’s price. Too often Bitcoin was cast aside by investors and the world at large. Numerous influential individuals have predicted the demise of Bitcoin multiple times over. Yet the coin is not only still here, but a single bitcoin is now worth more than an ounce of gold. What this exactly means for the future of Bitcoin as an investment and monetary option remains to be seen, but I think it can finally put any doubts of the viability of this coin to rest.
If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.