The price of a bitcoin is approaching $1,500; a unit of the cryptocurrency was selling for $1,438.80 on May 1, 2017, according to Coinbase. Bitcoin was not the only cryptocurrency exploding in price – ethereum prices were approaching $90 on the same day. A single coin of Ether was trading for $84.55 on May 1, 2017.
Bitcoin should clear $1,500 sometime this week which will be $560 more than the all-time high of $979 last reached in November 2013 according to Fortune writer David Z. Morris. Bitcoin’s price has risen by $917.87 over the past year; a unit of the currency could be had for $452.27 on May 1, 2017.
Ehtereum prices have increased by $34.38 in the past week, on April 24, 2017 a unit of ether was trading at $50.16, Coinbase data indicates. That price rose to $78.50 on April 29, 2017. The price of an ether coin grew by $67.19 over the past year, back on May 1, 2016, you could buy a unit of ethereum for $9.16.
Bitcoin leaves Gold in the Dust
The value of a bitcoin exceeded the price of an ounce of gold by $271.14 on April 30, 2017. A Troy ounce of gold was trading for $1,167.66 on the morning of May 1, 2017, according to Gold Price.
This indicates that bitcoin has replaced gold as the world’s hedging mechanism of choice. Average investors may actually prefer bitcoin to gold in uncertain times which is very bad news for gold bugs and gold-mining stockholders.
Interestingly many cryptocurrency analysts think the trend will continue because bitcoin and ethereum buyers tend to be conservative value investors that believe in a buy and hold strategy, Morris noted. My take is that the analysts are right because the new bitcoin boom is being driven by average investors not speculators and geeks.
Expect bitcoin and ethereum prices to rise for a while and hit a new high. My prediction would be $1,700 for bitcoin and around $200 for ether.
Gold Prices may Collapse because of Bitcoin
Also expect a major drop in gold values this year, as investors and speculators dump the precious metal and buy cryptocurrency instead. That will trigger a major fall in share values for gold-mining companies.
Some gold miners are already feeling the pain, Gold Corp (NYSE: GG) shares were trading at $13.77 on May 1, 2017. Newmont Mining (NYSE: NEM) was trading at $33.24 a share, and Barrick Gold (NYSE: ABX) was trading at $16.45 a share on the same day.
My prediction is that the gold price will fall below $1,000 at some point this summer and probably bottom out at around $600. Also expect to see many gold miners trading at less than $10 a share sometime this summer. Meanwhile bitcoins will probably be trading at $1,700 and ether at $200.
The people have spoken and they prefer cryptocurrency to gold. This is the beginning of a paradigm shift that will completely disrupt the financial markets.