BITCOIN surpass gold

BITCOIN surpass gold

A unit of the digital crypto-currency and payment system, BITCOIN has exceeded the value of an ounce of Gold, for the first time. The value of BITCOIN closed at $1,268 on Thursday (02 Mar 17), while an ounce (8 grams) of Gold was only $1,233.

Is it time to buy or sell BITCOINS? 

A unit of the digital crypto-currency and payment system, BITCOIN has exceeded the value of an ounce of Gold, for the first time. The value of BITCOIN closed at $1,268 on Thursday (02 Mar 17), while an ounce (8 grams) of Gold was only $1,233.

How Do BITCOINS Work?

Like all currencies, the value of BITCOIN is determined by demand and supply; how many people are willing to buy it or accept it as payment. BITCOIN is created as a reward in a competition, in which users offer their computing power; a procedure called "mining”. There are currently about 15 million BITCOIN in existence. BITCOIN can be exchanged for other currencies, products and services.

To receive a BITCOIN, a user must have a BITCOIN address - a string of 27-34 letters and numbers - which acts as a kind of virtual post-box, to and from which the Bitcoins are sent. These addresses are in turn stored in BITCOIN wallets, which are used to manage savings.

Why are BITCOIN increasing in Value?

The current high is being attributed to surging demand in China, where authorities warn, it is used to channel money out of the country. BITCOIN is attractive because of its anonymity and lack of government control.

BITCOIN are vulnerable to cybercrimes. In Aug 16, approximately 120,000 BITCOIN were stolen from BITFINEX, Hong Kong-based, BITCOIN exchange. The value of BITCOIN plunged by 23% but has recovered, since. The value of the theft estimated at US$ 72M, in Aug 16 is now valued at US$ 130M.

Assessment

Despite vulnerability to Cyber theft and price-volatility, BITCOIN continues to remain a popular currency and payment system. Though the current high is being caused by Chinese offshore buying, BITCOIN prices surged after India’s demonetization exercise, in Nov 2016. BITCOIN potential to avoid government control and national taxes makes it more popular. On a technical basis, the price chart has seen a ‘double-top’, awaiting a possible reversal. For the retail investor, It maybe a good time to profit, by liquidating the BITCOIN account. Caution is advised, if buying at this point in time. Gold maybe lower in value as on date compared to BITCOIN, but gold has universal acceptance, which BITCOIN does not have, as yet.

Comments