Bitcoin surges above $1,500 to record as more investors bet on 'digital gold'

Bitcoin surges above $1,500 to record as more investors bet on 'digital gold'
PHOTO: Pixabay

Bitcoin surged further into all-time high territory Thursday as investors bet the digital currency will gain even greater acceptance globally as a store of value and an investment vehicle.

At one point, bitcoin rose more than 5 per cent to a record $1,568.59 before retreating slightly, according to CoinDesk.

Data from TradeBlock showed some other exchanges had bitcoin above $1,600.

New interest in the currency out of Japan was the cause of the latest short-term upward move, traders said.

"Bitcoin can be thought of as digital gold," said Brian Kelly, founder of BKCM LLC and manager of a digital assets hedge fund.

"The upside for bitcoin is so much higher than upside for gold, in my view."

Gold futures for June delivery fell to $1,225.70 an ounce on the New York Mercantile Exchange, its lowest level since March 17.

The precious metal had topped $1,500 for about two years, even running above $1,800 at one point, but since early 2013 has not been able to recover back to the $1,500 level.

Over the last two weeks, bitcoin has climbed about 25 per cent into record territory on increased investor interest.

The cryptocurrency got a boost last week from news that the US Securities and Exchange Commission said it plans to review its listing rejection for what would have been the first US exchange-traded fund that tracks bitcoin.

Since the April 24 filing, the digital, currency has only once traded lower on the day, according to CoinDesk.

"Right now it's speculation over the ETF. That's been the biggest thing," said Kelly, a CNBC contributor who launched the digital assets fund for outside investors this year.

Increased interest from Japanese investors has also contributed to bitcoin's gains.

More than 10 Japanese companies are launching digital currency exchanges given increased legal recognition of the currencies and a scheduled elimination of a tax on digital currency purchases, the Nikkei Asian Review reported Tuesday.

Bitcoin plunged more than 25 per cent from record levels last month after the SEC denied the listing of the Winklevoss Bitcoin ETF, and subsequently the SolidX Bitcoin Trust exchange-traded product.

A heated debate among bitcoin users about the technological future of the currency also hit prices.

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