Notorious gold bug and Bitcoin cynic Peter Schiff has once again jumped at the opportunity to attack the cryptocurrency. This time Schiff has taken aim at the growing sentiment that Bitcoin can operate as a safe haven asset, and as a hedge against faltering markets — much like gold.

Schiff has maintained that gold is a viable and worthwhile investment whereas Bitcoin is worthless and could dump down to as low as $1,000. However, Schiff has become the butt of many jokes in the cryptocurrency space after a faux pas surrounding his own Bitcoin wallet, and that his predictions have become a reliable counter indicator.

Schiff has now pointed out that when the rest of the traditional markets were in freefall following continued pressure from the Coronavirus on the global economy, the digital asset fell in price, rather than acting like the anti-correlated force many have talked it up to be. He referenced the recent emergency interest cut from the Fed, the market (including gold), volatility, and questioned why Bitcoin was not going up.

The irony of it all, especially coming from a gold proponent like Schiff, is that gold — and silver for that matter — have also taken a hit amid the Coronavirus fears. Last week, Gold fell two percent after steadily rising to sit at $1,640/oz.

Advertisement
Continue reading below

Unfounded Attacks

Schiff’s closing remarks on the tweet asked why anyone should invest in Bitcoin if it was not going to go up. He further asked under what circumstances Bitcoin would rally. While his assertions are true that Bitcoin, as a supposed hedge against market uncertainty, should be rallying at this stage and it is not, his points are rather hypocritical.

Gold has long been known as the traditional safe-haven asset that works in a negative correlation to wide-spread market panics. The precious metal is a safe haven asset as it offers investors the opportunity to own a commodity that is unhinged from geopolitical turmoil.

However, this fact was tested the same as Bitcoin’s safe-haven status when the precious metal suddenly slumped amid Coronavirus fears. Schiff’s own tweet could have the word ‘gold’ in place of ‘Bitcoin’ and would still make sense.

Bitcoin Still Proving Itself

Only recently has Bitcoin has been spoken about as a hedge against traditional markets in times of uncertainty or as a safe haven asset. Gold, on the other hand, has a market history going back over 700 years and has well established its presence in the investment space.

But, it is for this reason that the fall of gold amid huge economic pressure is surprising as it is concerning. There will still be investors who back Bitcoin to see out this uncertain market and chances are, due to other factors like the upcoming reward halving, that they will come out with more money than they went in with.