Gold Prices Bow to Unstoppable Bitcoin Surpassing $50,000

Increasing Number of Experts Evaluating Bitcoin's Effect as a Gold Substitute

[Asia Economy New York=Correspondent Baek Jong-min] As the virtual asset Bitcoin surpassed $50,000 for the first time ever on the 16th, claims that Bitcoin could replace gold are spreading.

[Image source=Reuters Yonhap News]

Bitcoin's price reached $50,515 at 7:32 a.m. local time in New York on the 16th. It then reversed and as of 3:35 p.m., it is trading at $48,329.

Bitcoin rose 170% in the fourth quarter of last year and has increased by more than 70% since the beginning of this year.

The strength of Bitcoin's price became prominent after electric vehicle maker Tesla announced it had purchased $1.5 billion worth of Bitcoin.

Following Tesla's mention of the possibility of accepting Bitcoin as a payment method for its products, BNY Mellon, the oldest bank in the United States, announced plans to handle virtual asset custody, transfer, and issuance, and Mastercard also decided to support cryptocurrencies on its own network within this year, continuing the positive momentum.

Reports also emerged that major investment bank Morgan Stanley may add Bitcoin as an investment option. Nasdaq-listed MicroStrategy stimulated investor sentiment by announcing the issuance of $600 million in convertible bonds to purchase Bitcoin on the same day.

However, there are also opinions evaluating Bitcoin as "digital gold."

James Bullard, President of the St. Louis Federal Reserve Bank, said in an interview with CNBC on the same day, "Bitcoin is closer to gold than to currency." This pointed out that Bitcoin's high volatility is a negative factor for its use as currency.

JP Morgan Chase, the largest bank in the United States, also diagnosed that Bitcoin has emerged as a competitor to gold. JP Morgan forecasted that if Bitcoin receives a valuation similar to gold, it could rise to $146,000 in the long term.

Coincidentally, on the same day, gold fell in contrast to Bitcoin's strength. At the New York Mercantile Exchange, gold recorded $1,794.80 per ounce, down 1.5% from the previous trading day, breaking below the $1,800 level again.