Bitcoin Vs. Gold Revisited

Back in late 2016, I wrote a piece for Seeking Alpha entitled, Bitcoin Might Be A Better Investment Than Gold. At the time, the price of gold was trading at $1172.80 per ounce, and Bitcoin was at $741.25. In that piece I wrote, “I continue to believe that gold will struggle and Bitcoin will move higher as the world will reject low interest rate central bank policies of recent years and embrace technology.” While I was correct in my call, I never imagined that Bitcoin would trade to over $19,000, or even the $7,646.54 level which is the level it was trading at on August 1. Meanwhile, I am not all that surprised that gold at the $1215.80 level on the first trading day of August 2018 is $43 higher since Seeking Alpha published that piece.

It’s been a wild ride for Bitcoin and its digital currency brethren, while gold has not done all that much. Since last December, the yellow metal has traded from lows of around $1210.70 to highs of $1365.40 per ounce, a range of $154.70. Meanwhile, Bitcoin’s range has been from $5848.26 to $19,086.64, or $13,238.38. The width of the range in the cryptocurrency was equal to almost eleven ounces of gold, and today, at the $7,646.54 level, it costs 6.29 ounces of gold to purchase a Bitcoin. It is hard to believe that in November 2016, the digital currency was at a $431.55 discount to the price of the yellow metal.

A bad year for gold through July

Gold started off 2018 with a rally. The price of the yellow metal rose above its December 2017 low at $1236.50 and hit a high of $1365.40 in late January. The high was just $12.10 below the level of critical technical resistance at the July 2016 post-Brexit peak of $1377.50.

Original story: https://seekingalpha.com/article/4193582-bitcoin-vs-gold-revisited