One Bitcoin Is Now Worth More Than An Ounce Of Gold

Written by Justin Connell, The Foundation for Economic Education 

Editorial note: the relationship between the Bitcoin price and gold is interesting as a symbol of Bitcoin’s market success, and the broader success of cryptocurrency general, but has no greater structural significance. Moreover, the market capitalization of the gold market is vastly higher. Even so, given the widespread perception of gold as a safe haven, this event could have implications for the future of Bitcoin and similar digital assets.

One bitcoin has now, at least briefly, been worth more than one ounce of gold, hitting $1239.9 at the bitcoin exchange Bitstamp, while an ounce of gold was priced at $1238.67. The last time a single bitcoin might have been worth more than an ounce of gold happened in November 2013, more than three years ago. Having taken place based on Mt. Gox pricing models, possibly manipulated due to internal Mt. Gox trading bot(s), the legitimacy of bitcoin’s first dance with gold parity faces continued scrutiny. Regardless, the price of gold in bitcoin terms is now trading at an all-time low.

Bitcoin increased more than 125% over the course of 2016.

geralt / Pixabay

When, according to Mt. Gox, the bitcoin price exceeded that of an ounce of gold, it had just broken through the $1,000 threshold. Similarly, the bitcoin price crossed the $1,000 mark January 1 before gold-bitcoin parity in the first week of January 2017.

In April 2011, bitcoin realized parity with the US dollar. It later reached parity with silver (so nicknamed the “devil’s metal” for its ties to populism) at approximately $29.65 per bitcoin on February 19, 2013.

Bitcoin Outshines Troy Ounce of Gold in 2016

Bitcoin, long called “digital gold” due to its strict coin creation protocol involving a computational process dubbed “mining,” performed as a better safe haven, perhaps, than gold bullion.