Bitcoin, Gold, or Both?
Last year, when the price of Bitcoin in US Dollar terms surged, it coincided with the beginnings of a huge correction in the price of gold. Once the price of 1 Bitcoin surpassed the price of 1oz of gold there was an inevitable rash of articles comparing the two. Was Bitcoin the new gold? Would interest in the virtual currency spell the end for the yellow metal? Was it a sign that the end of the world was near? Subsequent events have proven that none of that was the case. Bitcoin and gold both continued to see price volatility, but both seem to have settled down this year, leaving open the question as to which those looking for an alternative to fiat currency should hold.
As usual in matters Bitcoin, that particular argument last year included a lot of exaggerated claims by adherents and misinformed statements by detractors. It quickly degenerated into a war of words in which, as is the way of any war, truth was the first casualty. Of course, as is also usual in matters Bitcoin, in reality not that many people were aware of the debate and even less cared. Those who were suspicious or distrustful of fiat currencies argued it out amongst themselves, while the rest of us got on with making and spending government issued pieces of paper.
This post was published at Nasdaq on September 16, 2014,.