The price of a bitcoin has climbed above that of a troy ounce of gold for the first time on record after the cryptocurrency enjoyed a dramatic upswing in interest since last year.
Bitcoin has jumped by nearly 33 per cent this year to trade at $1,265 on Thursday amid a surge in interest in China, where the authorities fret the digital currency is being used to facilitate capital flight from the country. Bitcoin has risen nearly 200 per cent over the past 12 months, despite efforts to curb its use in China.
Of course, comparing gold to bitcoin is arbitrary, given that the precious metal is measured in weight – a troy ounce of gold (about 31 grams) cost $1,233 on Thursday – while the virtual currency beloved of technologists is entirely ephemeral and abstract. But the cross is nonetheless symbolic of its unexpected staying power and influence in certain circles.
Although most of the interest has shifted towards the potential wider usages of blockchain – the electronic ledger that underpins bitcoin – the Securities and Exchange Commission is currently considering a proposal for an exchange-traded fund backed by bitcoin.
SEC officials on February 14 met with Tyler and Cameron Winklevoss – the bitcoin ETF’s champions – to discuss the proposal and a decision is due by March 11, according to Bloomberg.
The digital currency came close to the headline gold price in late 2013, when it spiked above $1,000 per dollar for the first time, but then quickly halved in value in 2014, traded sideways for much of 2015 before embarking on a sharp rally in the middle of last year.