Bitcoin worth more than gold in US for first time

By Barry Eitel

SAN FRANCISCO

The value of digital currency bitcoin hit a record high Friday buoyed by investors hoping the U.S. government would approve an exchange-traded fund.

Known as a cryptocurrency, bitcoin was invented in 2009 by a group of engineers under the name Satoshi Nakamoto. No printed currency is involved; instead, a computer algorithm mines more bitcoins from existing bitcoins.

And for the first time, bitcoin became more valuable than gold, usually heralded as an extremely safe asset.

According to analysis firm Coindesk, one bitcoin traded at around $1,280, with a daily high of $1,293.47 -- its highest value ever. Gold, on the other hand, fell to $1,231.5 per ounce Friday.

The optimism appears to be fueled by rumors the Securities and Exchange Commission (SEC) would soon approve the first bitcoin exchange-traded fund (ETF) in the U.S.

The SEC is expected to hand down a ruling March 11 whether to approve an EFT application that was filed almost four years ago.

During its eight years of existence, bitcoin’s value has been volatile and exchanges have been the victim of hackings.

Last March, one bitcoin was worth about $420. An ounce of gold was worth roughly the same amount.

On Friday, a leading Federal Reserve official urged caution about the volatile cryptocurrency.

"A digital currency issued by a central bank would be a global target for cyberattacks, cyber counterfeiting, and cyber theft," Fed Governor Jerome Powell warned during a conference at Yale Law School.

While the comparison of an ounce of gold to a single bitcoin is fairly arbitrary, it illustrates the mood of many investors.

Gold is usually in demand during uncertain times, but the market appears to have a lot of trust in President Donald Trump’s ability to cut business regulations.

It also seems investors are bullish. Many are willing to take a risk on bitcoin even with its unstable history.