**iNVEZZ.com, Tuesday 3 December:**
Seemingly, the best place to park one’s spare capital since onset of the global financial crisis has been Bitcoin, with the value of one unit having gone from under 10 cents when the ‘crypto-currency’ was introduced in January 2009 to an all-time high of $1,242, reached on one exchange last Friday. There’s nothing else that can hold a candle to Bitcoin’s returns, despite colossal bond-buying programmes from central banks around the globe pumping up financial asset values.
In point of fact, Bitcoin’s vertical climb has been mainly attributed to an ever-increasing demand for alternative forms of money, as currency speculators seek to limit their exposure to central banks and to protect themselves from the spectre of a hyperinflation which may or may not come with quantitative easing, depending on one’s view of things.
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According to the perceived wisdom, the key to Bitcoin is that it has a predetermined fixed amount of production that can ever be mined. To date, something over 11 million Bitcoins have been issued, with the algorithm eventually capping the total at 21 million – sometime next century. Bitcoin aficionados see this known quantity as a major point of difference from fiat money, which can be inflated at the whim of central governments.
But what an increasing number of observers are finding most interesting about Bitcoin’s parabolic rise in the past couple of weeks is that the surge is occurring as the spot price of gold continues to move lower.
The price of the precious metal is down about 27 percent year-to-date, while the BTC/USD has increased by more than 80 times its value of $14 at the start of 2013.
Bitcoin and gold are both being considered as alternative forms of currencies to fiat money. But while bullion is a very poor medium exchange in a fast paced electronic economic system, Bitcoin has the potential to “promote a faster, more secure, and more efficient payment system”, according to none other than outgoing US Federal Reserve chairman Ben Bernanke.
Cullen Roche, founder of Orcam Financial Group LLC, wonders whether Bitcoin’s almost unbelievable rise against the USD be a “sign of the anti-fiat money crowd voting with their wallets on the potential that gold really isn’t a viable form of future money while something like Bitcoin might just be”.
To this point though, the resort to Bitcoin for speculative investment far outstrips its use as a medium of exchange, despite the 6,260 percent increase in Black Friday sales made with the crypto-currency.
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