With the recent bitcoin price surge, cryptocurrency speculators are making some very bold claims. If his price growth continues for the foreseeable future, which is anything but certain right now, the price per Bitcoin may become higher than the value of one gold ounce. What such a shift would mean for the rest of the world, remains anyone’s guess. But it is an interesting option to consider, to say the least.
Surging Bitcoin Value is Quite Intriguing
Although Bitcoin’s value is seeing signs of a small retrace right now, the overall price gain in 2016 has been quite spectacular so far. Some people are even speculating how long it will take until the price per BTC overtakes the value of gold per ounce right now. Considering how one ounce of gold is worth US$1134, Bitcoin still has a long way to go.
But even if Bitcoin’s value were to outpace the money paid per troy ounce of gold, would it matter all that much. It would show confidence in Bitcoin as an investment vehicle, but that doesn’t mean more people will spend BTC all of a sudden. Moreover, comparing the value of one Bitcoin to one ounce of gold seems a bit futile right now.
Most investors and financial experts will focus on the overall market valuation of Bitcoin, which pales in comparison to gold. That is not surprising, considering gold has been around for over 4,000 years, and Bitcoin only exists for a few years right now. It would be quite odd to see bitcoin’s market cap surpass gold already, even though Bitcoin seemingly has more real-life use cases for smaller investors than bullion does right now.
It would make for an interesting headline to see Bitcoin’s price surpass the value of one ounce of gold for sure. Logic does not necessarily apply to media news these days, especially not in the financial world. Moreover, it would give Bitcoin enthusiasts bragging rights for a while. One shouldn’t underestimate the psychological impact such a drastic shift would have on the general public.
Scarcity alone does not give value to either Bitcoin or gold. While Bitcoin is far more scarce than bullion, it also has a much lower value. Explaining his deficit is easy, as bitcoin has far less of a “useful aspect: to most investors right now. Then again, that situation could change in the coming years, and make for an interesting future.
JP is a freelance copywriter and SEO writer who is passionate about various topics. The majority of his work focuses on Bitcoin, blockchain, and financial technology. He is contributing to major news sites all over the world, including NewsBTC, The Merkle, Samsung Insights, and TransferGo.