A single bitcoin has surpassed the value of an ounce of gold for the first time as its price surged to an all-time high.
The exchange price for one of the digital currency closed at $1,268 on Thursday, while a troy ounce of gold cost $1,233.
The price of the virtual cryptocurrency has soared over the past 12 months, attributed to a strong demand in China following the country placing restrictions on gold imports.
There is also speculation that the first bitcoin exchange-traded fund is set to receive US regulatory approval, Reuters reports.
Its price plummeted in October 2013 after online black market the Silk Road was shut down by the FBI and dropped sharply again in August 2016 after hackers stole bitcoin worth £29 million from digital currency exchange Bitfinex.
So could bitcoin eventually replace gold? Stock market expert Paul Mladjenovic said investors should be “cautious” about buying the digital currency.
He told Marketwatch in a Facebook Live Q&A: “This is digital money; you know what happens sometimes with digital stuff, if you’re not careful it could evaporate or it could just as easily be tampered with.
“Many people have looked at it as a proxy to gold and silver, with bitcoins, they try to minimise the quantity of it because that’s what makes money valuable, that there’s a sense of rarity.
“Whereas people look at other currencies across the globe, even the US dollar, you could print trillions and it becomes this unlimited thing, but the more you make of it, the less valuable each individual unit is.”
He added: “You’ve seen bitcoin perform very well recently and I think it’s more of a speculators market right now. I want to see it has a lot more stability and the same characteristics of durability that gold and silver have had over not just years, but centuries.
“So I think people should be a little bit more cautious of the speculators market until it proves it has the same kind of staying power as gold and silver.”
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