This morning, one unit of bitcoin became more valuable than an ounce of gold. Bitcoin’s all-time high rose to $1,239.90, while gold was worth $1,238.67. Known as digital gold, this is the first time in bitcoin’s eight-year history that it has exceeded the value of gold.
While some investors are still hesitant about the digital currency, others have grown more comfortable and willing to buy it when conventional markets, like stocks, are performing poorly. Bitcoin’s recent success isn’t terribly surprising when you consider its relative growth. While gold has risen about eight percent this year, bitcoin has risen over 25 percent in the same amount of time. And this comes after bitcoin increased by 125 percent in 2016, which was likely a product cash crises in underdeveloped and debt-burdened markets like in India, Venezuela, and Greece. It appears that bitcoin has benefitted from international economic turmoil more than gold.
Gold enthusiasts, however, remain skeptical, comparing bitcoin’s successes to other trend fads like the Beanie Baby craze that eventually died out in the 90s. While we can’t predict where bitcoin may go in the future, we do know that the bitcoin market is smaller and more volatile than the gold market. Yet, the Commodity Futures Trading Commission has classified bitcoin as a commodity, much like gold.
What do you think? Is bitcoin a viable safe haven option, or do you prefer gold and other precious metal bullion?
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