For The First Time Ever, One Bitcoin Is More Valuable Than One Ounce Of Gold

For the first time ever, one bitcoin is worth more than an ounce of gold. According to a CNNMoney report, the price of one bitcoin traded above $1,290 on Friday while an ounce of gold costs $1,228.

There are a few factors at play here. First, high demand for the digital coin helped push the price of a bitcoin higher throughout the year, although it did suffer a major setback. The price of a bitcoin tumbled 30 percent earlier this year after authorities in China increased their scrutiny of bitcoin exchanges.

People in countries like China are major supporters of bitcoin as it is perceived to be a safe haven, especially in times of turmoil when anonymity is also a factor.

But some experts are finding it hard pressed to explain why bitcoin is more valuable than gold — a commodity that has existed for centuries as opposed to the digital currency that few have heard of in the late 2000s

Related Link: Gartman: Bitcoin Is Nearly Incomprehensible At This Point

Charles Hayter, the CEO of the digital currency comparison website CryptoCompare, told CNNMoney that there is no direct correlation between gold and bitcoin. At the end of the day, bitcoin is its own class "in its own right."

Hayter also said that the issue in China that plagued bitcoin earlier this year has now been "brushed under the carpet," and any short-term woes will be erased over the longer term.

Image Credit: By Davidstankiewicz - Own work, CC BY-SA 4.0, via Wikimedia Commons