Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Business Finance

Whoa! Bitcoin is worth more than our most favorite precious metal

(FINANCE) The cryptocurrency Bitcoin’s worth was measured at $20 billion and has surpassed the worth of a favorite precious metal.

bitcoin laundering split fork

Bitcoing is ballin’!

Bitcoin, the cryptocurrency, has surpassed the cost of an ounce of gold, yet again.

CoinDesk’s Price Index shows one Bitcoin to be worth $1,268. Gold, in comparison, was trading at $1235. This latest development brings the cryptocurrency’s market capitalization to over $20 billion.

bar
The digital currency has surpassed the value of gold before. However, it was temporary. This time around, it could be a permanent status. Or so its supporters hope.

Two immediate factors contributed the most towards its latest surge in value.

First, there is speculation that the Securities Exchange Commission (SEC) will approve Bitcoin in the near future.

The Securities and Exchange Commission (SEC) is weighing whether to approve the Winklevoss Bitcoin Trust, and a decision can be expected by March 11.

Secondly, a depreciation of the price of gold.

Advertisement. Scroll to continue reading.

Many market watchers expect Venezuela to sell-off large amounts of gold reserves to pay its outstanding balances.

Speculations have already reduced the metal’s value by 10 percent.

Bitcoin the steadfast

Political uncertainty in the global political climate has also continued to add to the currency’s popularity.

The shock of Brexit and financial troubles of EU member states like Greece and Italy bring the viability of the Eurozone into question. Bitcoin proponents always try to fill that vacuum.

“If – or when – we see the break up of the zone and the currency, I believe bitcoin will fill some of the vacuum,” Russell Newton, a former JP Morgan trader who now owns the Global Advisors Bitcoin Investment Fund (GABI) told Coindesk.

The US’s hand in the surge

Even President Trump might have also helped Bitcoin. His budget plans clearly lays out a path to spend more on infrastructure.

Advertisement. Scroll to continue reading.

Increased spending, economists predict, would lead to a decrease in U.S. dollars and a rise in inflation.

Commodity in motion

A Saxo Bank report from December assumes this scenario. “If the banking system as well as sovereigns such as Russia and China move to accept Bitcoin as a partial alternative to the USD and the traditional banking and payment system… we could see Bitcoin easily triple over the next year going from the current $700 level to +$2,100.”

The Commodity Futures Trading Commission classifies the digital currency as a “commodity”.

[clickToTweet tweet=”Bitcoin is comparable to gold. But, is pending approval in China/ U.S.: Remains a ‘risky’ commodity.” quote=”In that sense Bitcoin is comparable to gold. However, pending government approvals in China or the U.S. it remains a ‘risky’ commodity.”]

Some analysts called for caution. Spencer Bogart, a researcher with Blockchain Capital, warned that the chances of its approval by SEC are very low.

Advertisement. Scroll to continue reading.

All eyes on the regulators

It is also important to remember that although $20 billion is a sizable market capitalization, its physical, real counterpart, gold, has an exponentially bigger market capitalization. Gold has also proven to be far less volatile, the recent dip due to Venezuelan sell-off speculation notwithstanding.

In comparison, when bitcoins surpassed gold last time, it was quickly followed by a months-long price collapse.

If it is approved by the SEC, currency as we know it might change very rapidly. A rejection could lead to a price collapse and prevent it from becoming mainstream.

All eyes shall now be on the SEC ruling.

#BitcoinBillion

Advertisement. Scroll to continue reading.

Barnil is a Staff Writer at The American Genius. With a Master's Degree in International Relations, Barnil is a Research Assistant at UT, Austin. When he hikes, he falls. When he swims, he sinks. When he drives, others honk. But when he writes, people read.

1 Comment

1 Comment

  1. Pingback: The SEC said no to Bitcoin... again - The American Genius

Leave a Reply

Your email address will not be published.

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

Business Finance

(FINANCE) The thousands of banks and millions of merchants on the Mastercard network could soon integrate cryptocurrency in their products and purchases

Business Finance

(BUSINESS FINANCE) India is potentially planning to ban cryptocurrency — and instead, they're planning to introduce their own version of it for purchase.

Business Finance

(BUSINESS FINANCE) Losing the password to your Bitcoin wallet often means potentially losing your cryptocurrency. But this didn’t stop a Russian investor from getting...

Business Finance

(FINANCE) Small brands are contemplating accepting cryptocurrencies, and the Lightning Network hopes to make the process less cumbersome.

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.