For the first time in bitcoin’s price history, one bitcoin had exceeded the value of an ounce of gold, an asset that is often compared to the cryptocurrency. Trading at $1260 at the time of writing, it is also a new all-time high for bitcoin as well. Is it time for Bitcoin to join the ranks of gold and silver as a long-term store of value? Paul Mladjenovic, the author of “Precious Metals Investing for Dummies,” thinks not.
While last year BTC-USD was the strongest performing currency in the world and has been since 2013, there is one characteristic in a currency that Mladjenovic looks for that which he believes bitcoin still does not possess: stability.
While gold, or XAU-USD, is only up 7 percent this year compared to BTC-USD’s 25 percent, bitcoin is still much more volatile of currency. Thus Mladjenovic argues that the cryptocurrency not suitable yet to be used as a store of value, as much of its value is still speculative.
With the cryptocurrency only being eight years old compared to gold and silver being used throughout history as a store of value, Mladjenovic firmly believes that bitcoin remains a speculative market despite the upward movement experienced in the last couple of months.
Furthermore, bitcoin has broken through the psychological barrier of four digits. This feat has been achieved in every single fiat currency in existence, reminding us of the contrast between the digital scarcity of bitcoin and the creation of traditional money out of thin air, via banks extending loans.
With USD being one of the more cited currencies, even against the British Pound the one thousand barrier has been broken, currently trading around £1037.50 on Coinbase. This display of bullish dominance only adds further fuel to the rocket, with a slow and steady rise that looks like it could propel BTC-USD into $1300 territory.
The trends from 2016 carry on to 2017, with no signs of stopping. With an increasingly popular perception that currencies around the world are becoming more and more destabilized, coupled with improving fundamentals and liquidity, bitcoin is moving in the right direction to become a part of any investor’s portfolio.
With the long awaited COIN ETF decision due March 11, public and professional sentiment has become much more receptive. With more certain guidelines and law of the digital currency than in the past, as well as new regulation of the Bitcoin scene in China as well as Japan, more businesses are at ease with handling the cryptocurrency.