Home Headlines Bitcoin hits $2,700, a 500 fold increase in five years and doubling in price since May 1st.Previous surges – in 2011 and 2013 – have been followed by dramatic crashes Significant premiums seen in Asia, over USD price Total cryptocurrency market cap reached over $90bn, last week Market remains small and volatile Comparisons between bitcoin and gold are old, invalid and misleading Both bitcoin and gold offer opportunities to diversify away from corrupt financial system What’s going on with bitcoin?Introduction Last week the bitcoin price hit $2,700.A 500-fold increase in five years and a doubling in price since the start of the month.Most people are aware of bitcoin tangentially, few are really conscious of it day-to-day and even fewer people are actually in bitcoin.Other significant cryptocurrencies, such as Ether and Ripple have also been going great guns and these are even less prominent in the public domain.If something such as bitcoin with such a small market cap and very little public awareness is doubling in price in less than a month, what does it mean?

Why is it behaving like this?Is it in a bubble?Is it a scam?Does it means that you should be getting in on the act?And what does it mean for its contemporaries, such as gold?We take a brief look at why the price has been climbing, what this means for the future of cryptocurrencies and, most importantly, what this says about gold.Read full story here….Access Award Winning Daily and Weekly Updates Here June 2017 May 2017 April 2017 March 2017 February 2017 January 2017by GoldCore What's going on with bitcoin?Last week the bitcoin price hit $2,700.Most people are aware of bitcoin tangentially, few are really conscious of it day-to-day and even fewer people are actually in bitcoin.Why the spike in the bitcoin price?I was asked this question recently on question-and-answer site Quora.I include the answer below, with some edits and further information.It does not focus on specific events but instead on both the short and long-term drivers of the bitcoin price.

It should be noted that whilst the price of bitcoin has fallen back from it’s highs of last week, it has not taken the same tumble it has done previously following price-spikes.Before I go on to the other reasons why the bitcoin price is rising, gold investors should note that the following reasons for bitcoin’s price climb are exactly the same reasons why gold has value and climbs in price.I have written and tweeted extensively about the gold versus bitcoin issue.bitcoin synchronisation dauert ewigIn short, I believe that it is a non issue in terms of the fact that I do not believe they are competing assets.bitcoin ecdsa securityI’m in the minority, as the mainstream continue to compare the two assets.etotheipi bitcoin

This is inevitable given the reasons for both bitcoin’s creation and for some investors are to mimic gold’s unique combination of characteristics.Many on Twitter have accused those of us who believe that they are not competing assets, as trying to prop up gold and that we’re in denial about bitcoin usurping gold as the ultimate reserve currency.This isn’t the case at all, both gold and bitcoin are alternative assets.Despite this, physical gold is the clear safe haven on account of it’s history, physicality, proven value and reduced-exposure to modern technologies.gmg bitcoinAs explained above, some of bitcoin’s price performance can be attributed to geopolitical events, however a CoinDesk survey at the beginning of the year shows that only a small percentage of those surveyed pointed to macroeconomic factors as the reason for the price climb, many in the crypto world still consider technological improvements within the ecosystem to be the greater support for higher prices.bitcoin food store

This suggests that for now, gold remains the ultimate safe haven when it comes to great geopolitical and financial issues.Bitcoin’s volatility makes it difficult to for investors to place their faith in the currency due to the uncertainty of whether or not it will still ave value (let alone where it’s price will be) in a year from now.With physical gold there is far more certainty both in terms of its value and its security, when stored in a segregated, allocated manner.bitcoin government regulationAs we wrote back in January: Currently bitcoin plays a different role to gold.For want of an analogy, bitcoin is more the cash, whilst gold is more the savings.It is likely that we will see those looking at securing their wealth across both assets.This is likely to be done in a similar way that we see gold investors also buy silver, and divide holdings between stored bars and coins kept at home.

It is possible for us to take any asset and demonstrate staggering returns over a perfectly chosen period.The fact is that for now, the bitcoin investment market is too new and under reported to know what role the currency may play.…owning bitcoin directly can bring its own security risks and this is something there is little education and understanding about.In contrast, holding gold as part of a balanced portfolio and as a safe haven asset has been part of the public consciousness for centuries and remains understood by many today – especially in Asia.Conclusion - Nothing to see here Speculation and volatility is bitcoin’s weakness at present, or so believe the mainstream.It is worth remembering that speculation in and of itself is not a bad thing.Cryptocurrency markets should not be criticised for the fact that this is going on.Speculation is the product of a free market, it is also evidence of organic growth and a growing user base.Spikes such as these do a great job of drawing in awareness of the space in the early years.

Unsurprisingly supporters of cryptocurrencies remain un-phased by this latest fall in price.As with those who invest in gold, it is the wider outlook, the ecosystem and the real value which gives supporters confidence that there is little to worry about here.All markets have a dynamic where by seasoned traders and speculators use price spurts to lock in profits, as new demand enters the market (generally thanks to a small price increase, announcement or geopolitical event) the price is bid up and profits are taken.The difference with bitcoin and the like is that they are much, much smaller and newer markets and so we see far greater volatility.We shouldn’t be surprised by the mainstream’s distaste or uncertainty surrounding the currency, in fact we should be hardened and assured by it.This is the same treatment we see for gold, something which humanity has held faith in for thousands of years.The attention towards bitcoin and its recent price performance is not only validation for itself but also for gold and silver.

Whilst bitcoin’s price rise might mainly be down to speculation it is also thanks to a growing desire to hold investments outside of the financial system.This, validates the role of precious metals.In time, we will see speculators become investors and investors become diversifiers.This is good for those holding gold and silver, as explained in January: Increasingly, gold and bitcoin may be seen as very much complementary assets, but bitcoin buyers should be aware of the volatility of bitcoin and of how speculative it remains today.Those considering buying should only own a very very small percentage of their wealth in bitcoin.While gold and silver can constitute as much as 20% of a diversified portfolio – bitcoin should be less than 3% or 4% of one’s wealth.Also, if buying bitcoin, it is prudent to apply the same logic to owning bitcoin as they do for gold – diversify, own the currency in the safest ways possible – including some offline in secure ‘cold’ storage and monitor the wider political, financial and monetary environment.

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