Bitcoin tops price of ounce of gold

The price of one Bitcoin shot past the price of an ounce of gold for the first time in history yesterday. The development comes as a milestone with some investors referring to the digital currency as "digital gold."

Last evening, the price of one Bitcoin was $1,271, according to CoinDesk's Bitcoin Price Index, while gold per ounce was priced at $1,235, according to Oklahoma-based precious metals retailer APMEX.

Around this time last year, one Bitcoin traded at $421.60 and with the value now around $1,200 the digital currency had tripled in value in the last 12 months. Gold, however, continued to trade at around the same price it was a year ago.

"Gold has been going up but it hasn't been rising as rapidly as Bitcoin," digital currency trader Brian Kelly said, NBC News reported.

According to some commentators, the surge might have something to do with an upcoming decision by the Securities and Exchange Commission on whether to approve a bitcoin exchange-traded fund (ETF) proposed by venture capitalist twins Tyler and Cameron Winklevoss four years ago.

In case the SEC approved the proposal, the ETF would have to buy an estimated $300 million worth of Bitcoin, potentially doubling the value of the currency.

Officials from the US Securities and Exchange Commission met with the Winklevoss twins on 14 February to discuss their proposal for an ETF based on the digital currency, according to a short notice of the meeting published on 22 February. A decision would be taken by 11 March.

An approved ETF would make it easier for small traders and institutions to invest, further boosting the digital currency at a time when it was hitting new highs almost daily. Spencer Bogart, head of research at venture-capital investor Blockchain Capital said in an interview that around $300 million could pour into a bitcoin ETF in its first week.

''I'd be very surprised if it did anything but double from whatever levels it is at beforehand,'' Bogart said, Reuters reported.