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Bitcoin Price Overtakes Gold Price for the First Time Ever Lombardi Letter 2017-11-28 02:40:21 gold price bitcoin price price of bitcoin american dollar u.s economy The Bitcoin price surpassed the gold price for the first time ever. News https://www.lombardiletter.com/wp-content/uploads/2017/03/Bitcoin-Prices-150x150.jpg

Bitcoin Price Overtakes Gold Price for the First Time Ever

- By Lombardi Letter Editorial Desk |
Bitcoin Prices

Is Bitcoin the New Gold?

The price of Bitcoin (BTC) has surpassed the gold price per ounce for the first time ever, making some investors view the cryptocurrency as the new hedge commodity. The gold price fell for a third straight session to $1,240 per ounce while the Bitcoin price rose to $1,260 by late-morning trading on Thursday.

The gold price has been driven down by a strong U.S. economy, a strong dollar, and the increasing likelihood of an interest rate hike by the U.S. Federal Reserve. The interest rate increase could take effect by mid-March if the Fed decides to go through with the raise that it has discussed.  (Source: “Gold loses luster as dollar climbs to 8-week high,” MarketWatch, March 2, 2017.)

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Bitcoin, on the other hand, has had a volatile 2017 so far. In fact, while some investors are looking to Bitcoin as potentially surpassing gold as the risk asset of choice, others are still concerned by the built-in volatility of the online currency. (Source: “Bitcoin Reaches Parity With Gold,” Zero Hedge, March 2, 2017.)

The last time that Bitcoin came near the gold price was in early January. The two value vehicles nearly crossed paths before the Bitcoin price shot down from $1,130 to a nadir of $800.00 in the matter of a few days.

Bitcoin has since recovered, and now has surpassed the gold price per ounce for the first time in its history.

Bitcoin has seen a 27% increase since the beginning of the year. Gold has grown 8.5% in that same time.

The gold price has typically had an inverse relationship with the American dollar. If the U.S. economy continues to experience strong growth, analysts expect gold to decline in value in the coming months. Bitcoin, alternatively, experiences no such direct correlation.

A large chunk of Bitcoin transactions have been taking place in countries like China, where investors seek ways around strict currency regulations.

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