It’s Official Bitcoin Beats Gold
The price of a bitcoin exceeded the value of a troy ounce of gold for the first time on March 2, 2017.
Coinbase reported that a bitcoin was trading at $1,262.30 at 16:41 Hours (2:40 PM. Mountain Time). A troy ounce of gold was trading at $1,235.07 at the same time, according to Goldprice. that means a bitcoin was worth $27.30 more than an ounce of gold.
This means that bitcoin and not gold is now the world’s hedging mechanism of choice. Mr. Market has spoken the people prefer the more versatile and easier hedging technology to the yellow metal.
It is easy to see why anybody with a credit card can go online and buy bitcoin instantly. More importantly the same person can cash out of bitcoin instantly without leaving his couch. He can also use bitcoin to make a wide variety of purchases online including shopping at Amazon or Walmart via gift cards.
Is Bitcoin Better than Gold?
All this indicates two things first a lot of people think bitcoin is better than gold and second a lot of people out there are scared to death of inflation and a market collapse.
The bitcoin price indicates that a lot of really smart and sophisticated investors are pulling their money out of stocks and currency and putting it into bitcoin. This probably includes a lot of Chinese afraid for the yuan, Indians who are scared of the rupee, Brits who are frightened for the pound and Europeans who are leery of the Euro.
It also includes a lot of Americans that are skeptical of the dollar and the Trump rally. Given Trump’s reputation as a snake oil salesman, it easy to see why.
Naturally a lot of people will wonder if the bitcoin rally will continue. My guess is that it will be there will be a sharp correction in the next few days. Bitcoin will fall back below gold then rise over it again. At some point bitcoin’s price will permanently exceed that of gold.
One thing is certain, now is a good time to sell your gold-mining stocks. They’re about to lose a lot of value as the world’s money migrates into bitcoin.