Bitcoin Price Jumped to a New Record High
For a long time, gold enjoyed the title of being the most valuable savings tool worldwide.
Five months ago, Bitcoin’s price soared and it soon became as costly as gold.
Last week, however, a significant change in Bitcoin’s price took place.
It reached as high as $3,400, which is almost three times higher than an ounce of gold.
According to a report by Bloomberg, the precious metal closed at $1,257, which is almost $2,000 lower than Bitcoin’s price.
Bitcoin Value Increased in the Midst of Turbulence
The strength of Bitcoin comes despite several upheavals the cryptocurrency faced in recent days, including a split.
And for the first time in history, the price of Bitcoin reached and surpassed $3,200.
The month of August so far has seen the cryptocurrency selling for more than triple the price for last year.
Compare that to the price of gold, which realized a 10 percent increase only since last year.
What Does This Mean for Bitcoin?
Some analysts say this increase in price and value could be the result of an increase in institutional sponsorship.
This possibility is likely because of the imminent trading of Bitcoin and its futures at high levels of international finance.
The two derivatives have yet to launch, but are expected to do so later on this year or in early 2018.
But despite Bitcoin’s shadow, gold is still the ultimate store of value.
Comparing the markets of the two derivatives, gold has an overall $7.5 trillion market, which overshadows that of the Bitcoin, capitalized at $57 billion this month.
Security Challenges Facing Bitcoin
In the recent past, Bitcoin faced several illicit finance threats, including the WannaCry cyber attack that affected multiple organizations, hospitals and government entities worldwide.
Also, this summer U.S. President Donald Trump signed a bill that established new sanctions against Russia, North Korea and Iran.
The new law included a note about preemptively studying cryptocurrencies so as to help identify those emerging threats.
The U.S. government is also showing signs of ramping up cryptocurrency regulation, with the aim of helping curtail those threats.
What Does Bitcoin Price Mean for Gold?
When you compare the trends between the two modes of financial value assessment, you may notice that Bitcoin is turning into a kind of commodity.
But it is important to distinguish that the cryptocurrency is not a commodity when you consider the fact that gold’s status as a commodity is thousands of years old.
But analysts say the fact that BTC is surpassing an ounce of gold does not mean that gold is losing its value.
Instead, it signifies the growing appetite of alternative assets among investors.
However, the recent hike in Bitcoin’s price was not in vain.
It pushed the collective market capitalization of the cryptocurrency above $50 billion for the first time.
In early August 2017, the BTC price has risen by more than $600.
And since the beginning of the year, the price of the cryptocurrency has almost tripled.
But this month has seen BTC reach its peak.
When there is a good opportunity for those who have doubts about BTC to sell, there’s also a higher likelihood that the coin’s price will continue to grow.
So far, the bubble has yet to burst.