The price of Bitcoin jumped to a new high on Friday, pasting the value of one ounce of gold for the first time. One unit of the crypto currency rose to a fresh record high of $1,292.71 at 7:30 a.m. in New York. While gold is trading lower at $1,223.58 an ounce on Friday.
Part of the reason for the jump is due to tighter currency restrictions in countries such as China and India. While speculation on approving a bitcoin-based ETF also boosted the demand of the virtual currency.
“We’re a long way from bitcoin establishing its properties as anything that could be considered to be a reasonably stable store of value,” John Butler, head of wealth services for GoldMoney, said in an interview. “The fact that it’s passing through gold is just arbitrary.”
However, gold have a rough week. The price of yellow metal has declined more than 2 percent this week. The strengthening dollar and several comments from Federal Reserve members signaling towards a potential interest rate hike in March put pressure on gold.
“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,” Fran Strajnar, co-founder & CEO of data and research company Brave New Coin, told CNBC via email.