Peter Schiff Mocks ‘Fool’s Gold’ Bitcoin Rally, Encourages Gold Buying Instead

20 January 2023, 15:52 GMT+0000
Updated by Ryan James
20 January 2023, 15:52 GMT+0000
In Brief
  • Bitcoin critic and gold bug Peter Schiff implores investors to buy gold instead of Bitcoin, despite the asset's recent breakaway from equities correlation.
  • Schiff had previously predicted that gold will rally in 2023, even as the U.S. dollar weakens.
  • There is, however, a growing bullish case for Bitcoin as traders sink bigger amounts and the fear and greed index has tipped towards neutral.
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Bitcoin critic Peter Schiff says now’s the time to buy gold rather than Bitcoin, despite the crypto asset’s recent rally.

Schiff, whose son Spencer is a Bitcoin maximalist, said that Bitcoin’s 27% rally since the start of the year is masking a gold rally that’s just starting.

Peter Schiff Says Gold Will Be The Recession Hedge, Not Bitcoin

According to Peter Schiff, investors should rather look to gold, which has reached its highest level of $1,934 in nine months and is set to continue its rally.

Schiff had previously said in an Epoch Times interview that gold would rise in 2023 as the dollar weakened. He added that rising interest rates would inflate national debt obligations, leading borrowers to service debts rather than save. Criticizing the Fed’s attempt to cool inflation through increasing rates, he said that ongoing rate hikes have not modified consumer spending habits. Real estate consultant Nick Gerli recently confirmed that Americans’ spending levels have reached a record low.

Investment Managers Underweight Stocks as Bitcoin Breaks Correlation

Even as stock outflows reach a peak not seen since Dec. 2021, many investment managers are under-allocating clients’ portfolios to include fewer equities to levels not seen since 2020. They have only underweighted investments to similar levels twice since 2001.

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These stock outflows have historically accompanied market bottoms. With the inverted treasury yield curve deepening, which has previously foreshadowed recessions, Bitcoin’s recent departure from equity correlation means it could soon fulfill its merit as a safe haven asset.

Bitcoin has risen roughly 27% since the start of 2023, beating the Dow Jones and S&P 500, which have seen three consecutive days of declines.

BTC Rally
BTC/USD Daily Trading Chart | Source: TradingView

The rally continued mostly unabated as news broke that crypto lender Genesis would be filing for bankruptcy, as the contagion effects of last year’s implosions slowly recedes from investors’ memories. The Crypto Fear and Greed Index has tipped from fear to neutral between Jan. 19 and Jan. 20, 2023, implying market apprehension is slowly dissipating.

Crypto Fear and Greed
Crypto Fear and Greed Index | Source: Alternative

According to data provider Kaiko, the average trade on notable exchanges increased by $300 in the week ending Jan. 17, 2023.

Drew Forman of Cowen Digital, an institutional trading and custody company, recently told Bloomberg that institutions are fueling the current rally.

In light of Bitcoin’s rally, MicroStrategy Executive Chairman Michael Saylor recently tweeted that “Bitcoin is stronger.”

MicroStrategy, the largest corporate holder of Bitcoin, will build infrastructure to allow corporations to receive revenue through Bitcoin’s Lightning Network.

Venture capital firms are also riding the crest of Bitcoin’s rally to invest in technologies they see as the future of crypto in 2023. Most investments are now focusing on securing and scaling Ethereum after last year’s major upgrade. Others are intent on improving the experience of custodying one’s own crypto.

For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here.

Disclaimer

BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.