People Are Buying A Lot Of Silver And Gold With Their Bitcoins

At least $US7 million worth of bitcoin — or 6,296 coins — were spent on Black Friday, according to data from Bitpay, one of the country’s largest payment service providers. )The price of Bitcoin averaged about $US1,200 on Nov. 29.)

And what did a huge number of people buy? Gold and silver bullion. (The price of the former, by the way, nearly matched bitcoin’s on Friday).

The top-three online retailers whose payments Bitpay processed on Black Friday were KnCMiner (whose gonzo order volume for its latest mining device we told you about yesterday), Gyft, and Amagi Metals.

We asked Gyft, a gift card site, for any more data about what people bought with Bitcoin, and spokesman Ian Chaffee could only say electronics and food.

Amagi Metals chief Stephen McAskill told BI in a separate interview that his site processed $US900,000 worth of bitcoin between Thanksgiving and Sunday. The biggest selling items? Silver and gold coins and bars.

“To me it makes sense,” he said. “A lot of bitcoin enthusiasts are interested in sound money, money that doesn’t lose value.”

But there are still enough users who think bitcoin will someday retain the value of gold, he said.

For the month of November, Bitpay processed 55,288 bitcoins. They did not provide us with a total dollar figure for the month. Here’s a chart:

Bitpay chart

The price of bitcoin as of Wednesday afternoon was $US1,1184. The price of an ounce of gold was $US1,228.