Bitcoin has hit another exciting milestone and this time against gold bullion, the world’s biggest and oldest reserve asset. On New Year’s day, Bitcoin price claimed an all-time high against gold, which further confirmed that demand for digital assets is on the rise.
As Bitcoin surged above $29,500 on Friday, the virtual currency hit a high of 15.40 gold ounces, in the process surpassing the past peak reached in December 2017.
Based on data from various publications, the bitcoin-gold rate peaked at 15.62 ounces in the early morning session. Notably, 2020 was a watershed year for Bitcoin as institutional investors joined the market which helped catalyze a bull market that has not been seen in the crypto’s 11-year history. The biggest cryptocurrency in the market saw an incredible surge of almost 300% in 2020.
Gold also posted an impressive profit margin for the year. However, these gains seemed pale compared to bitcoin’s meteoric surge. The yellow precious metal’s spot price ended 2020 on a 25% gain.
Bitcoin’s largest proponents think that the crypto is eating away at gold’s market capitalization as the investors opt for the portability, efficiency, and proven scarcity of the asset. Surprisingly, this view is also endorsed by the JPMorgan Chase analysts who think that Bitcoin’s digital gold narrative is pushing capital away from the precious metal markets.
Some think that Bitcoin’s supply squeeze may send the prices higher over this year. According to recent reports, the Grayscale digital asset manager acquired almost three times the bitcoin mined in December. Demand from Cash App, PayPal, and others has also resulted in a supply shortage of bitcoin.