Bitcoin price exceeds gold for first time on expectations of ETF

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A chain of block erupters used for bitcoin mining is pictured at the Plug and Play Tech Centre in Sunnyvale, California. The emergence of initial coin offering (ICO), in which bitcoins are raised for a new blockchain venture, is a similar model to the initial public offering in a stock market. Photo: Reuters

Published: 9:24pm, 3 Mar 2017Updated: 10:54pm, 3 Mar 2017

The price of bitcoin soared to a record high and exceeded a troy ounce of gold for the first time as cryptocurrency traders speculated on the establishment of the first-ever bitcoin-based exchange traded fund.

Bitcoin continued to advance on Friday, trading 2.1 per cent higher to its historic high of US$1,287.5 after the digital currency reached parity with the per-ounce spot price of gold on Thursday at US$1,265.

“The bitcoin ETF proposal in the US could be a catalyst for the recent price rally,” said Cheung Chun-yin, a PwC China fintech partner. The proposal for a bitcoin ETF is under discussion with the US Securities and Exchange Commission (SEC), according to Bloomberg. A decision is due by March 11.

Bitcoin trading, which is evolving and starting to resemble the traditional financial market, is being embraced by more professional investors as demand is not only coming from China but all over the world, Cheung said.

The emergence of initial coin offering (ICO), in which bitcoins are raised for a new blockchain venture, is a similar model to the initial public offering in a stock market, providing a further example of the popularity of the digital currency, Cheung added.