Bitcoin’s meteoric price rise is showing no signs of slowing down and its latest all-time high has priced the asset higher than a 20 ounce gold bar.
Over the past six hours, Bitcoin prices topped $40,000 briefly according to Tradingview.com. The move has added a further 5% over the past 24 hours and the rally is showing no signs of cooling down yet.
Industry observers often call Bitcoin “digital gold” as it is a store of value asset, and this latest price peak pushed prices higher than those for the standard 20 ounce gold bar.
At the time of writing, gold was currently trading at $1912/oz according to Goldprice.org, so a 20 ounce bar would set you back $38,240. Bitcoin’s price, taken at the same time, was a little over $39,000.
— Documenting Bitcoin (@DocumentBitcoin) January 7, 2021
Secretary and vice chairman of the DigiByte Foundation, Rudy Bouwman, while touting his own cryptocurrency said:
“Bitcoin will become like gold bars, only a store of value.”
This rally is slightly different to the one in 2017 as it is being primarily driven by institutions which, unlike retail traders, tend to hold the asset for long term investment rather than flip it for a short term profit. This notion enforces the store of value properties of Bitcoin making it more comparable to gold than ever before.
In terms of performance, Bitcoin has made a whopping 378% over the past 12 months whereas gold has only managed to gain 21.6% in the same period.
Additionally, Bitcoin is still making new all-time highs but gold prices have retreated 7.6% from theirs, which was $2,070/oz on August 6, 2020.
Gold bug and perpetual Bitcoin basher, Peter Schiff, finally admitted that Bitcoin was actually taking demand away from gold, as evidenced by those figures.
“To the extent that Bitcoin is actually taking any demand away from gold, that’s making Fed governors extremely happy. A rising gold price is what central bankers fear most. Bitcoin is their best friend, which may explain why regulators aren’t in a hurry to help pop the bubble.”
With the price of a single Bitcoin now higher than a bar of gold, the question remains; how much further can it climb?