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Forex

Bitcoin breaks gold's all-time dollar price record

Symbolic win for newer 'stateless currency'

TOKYO -- Bitcoin beat gold's highest-ever dollar price Friday to score a symbolic milestone after skyrocketing 60% in the past month as speculators bet big on its wild gyrations.

CoinDesk, a site tracking virtual coinages, showed bitcoin touching the $1,954 range at one point, beating the precious metal's record of around $1,920 per troy ounce on Sept. 6, 2011. Bitcoin's price occasionally swings more than $100 in either direction in one day. As recently as March, it dipped below the $1,000 line.

Bitcoin is traded in online marketplaces. It is difficult to compare directly to gold, which is traded by weight, but the two currencies share important traits: supply of both is limited, and either can be bought with any country's currency. Bitcoin's record-breaking high could be taken as a sign of a power shift from one "stateless currency" to another.

Most bitcoin trading -- as many as 80-90% of market participants, some suggest -- comes from China, where investors fear their yuan will lose value as the currency softens. Capital controls there limit where investors can put their money, prompting many to shift funds to bitcoin to skirt regulations.

Japanese trading of the virtual currency has risen lately as well. Electronics retailer Bic Camera has begun experimenting with accepting payment in bitcoin at some metropolitan-area stores. Japan will also stop collecting sales tax on purchases of the currency in July, lowering a hurdle to entry.

Bitcoin is not just "becoming an emergency shelter for funds, it's also in a state where buying invites more buying," notes Yuichi Ikemizu, Tokyo branch manager for ICBC Standard Bank.

(Nikkei)

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