One of the most debated topics since the main cryptocurrency got international recognition, is about the correlation of Bitcoin with gold. Currently, it is important because price movements could depend on it.
In a series of messages on the social network Twitter, the CEO of Euro Pacific Capital, Peter Schiff, assured that for Bitcoin things will not go well in a short time. At the same time, he claimed that those who consider Bitcoin as digital gold make a mistake.
But Schiff’s views appear to be not entirely convincing, at least to Bloomberg analyst Mike Mcglone. He considers the correlation between Bitcoin and gold to be extremely strong.
Peter Schiff and the impending Bitcoin sink below $ 9,000
The relationship between Bitcoin and gold, according to Peter Schiff, is reverse. In other words, as gold appreciates, the cryptocurrency will tend to depreciate. The price of both assets seems to be going through a stagnation phase. The precious metal exceeds $ 1,800 and the main cryptocurrency struggles to exceed $ 9,000.
However, Schiff does not see a simultaneous recovery of both possible. On the contrary, it considers that one rises at the expense of the fall of the other. If this opinion is true, the price of Bitcoin would not take long to drop below $ 9,000 per coin.
“It gives the impression that gold is reducing resistance just below $ 1,800 while Bitcoin is reducing its support just above $ 9,000. I hope that both resistance and support will ease, with the rise in the price of gold and the collapse of that of Bitcoin. ”
Anti-Bitcoin militancy and controversy
It is important to note that Peter Schiff is one of the staunchest opponents of Bitcoin. Instead, it proposes that gold is and will remain the only store of value of importance.
His views have generally been the focus of controversy by cryptocurrency enthusiasts. For these, the correlation between Bitcoin and gold goes far beyond the expert opinions of Peter Schiff’s category. Some proponents of Bitcoin as “digital gold,” Schiff respond with simple investment arguments.
Thus, for example, in a past Twitter message on June 30, the analyst assumed in a question that an ounce of gold would soon be worth the same as a Bitcoin. Among the hundreds of responses, a user commented:
“If I had bought gold in 2012, at a price of $ 1,900, today in 2020, I would still have the same $ 200 (loss?). But if you had bought a Bitcoin in 2012 at $ 50, you would now have more than $ 8,000. Oh, with Bitcoin you can buy things, can you do the same with gold? Also, can’t you fake gold? ”.
A strong correlation between gold and Bitcoin
As already stated, other analysts like Mike Mcglone do not believe that the price of Bitcoin should necessarily sink as a result of the rise in gold. According to him, the correlation between the two is getting closer:
“The same forces that drive gold support Bitcoin”, explains a Bloomberg analyst quoted by the Bitcoinist portal. In the same way, a report by Coin Metrics, explained by the other Decrypt news portal, in which all the details of the correlation between Bitcoin and gold since the pandemic outbreak is analyzed, should be brought up.
The correlation between the two, they explain, is highly strong. It has been strengthened since the start of the large-scale spread of COVID-19. Since then, the behavior of both Bitcoin and gold has been extremely similar.
In this sense, Mcglone’s opinion is diametrically contrary to that held by Peter Schiff and much of the evidence seems to support it. Still, the latter has a long tradition of business and successful business predictions, so his analysis cannot be lightly dismissed as a matter of simple controversy.
Data to consider
- At the beginning of the COVID-19 pandemic the price of Bitcoin fell at the same time as that of gold.
- The recovery of both assets to their state prior to the announcement of the pandemic by the WHO, occurred faster in Bitcoin.
- Among the factors that contributed to the rapid recovery of the cryptocurrency, was the expectation for the Halving and the unrest in the United States.
- Currently, the two assets are stagnant at $ 1,800 gold and $ 9,000 Bitcoin.
- Bitcoin’s annual return exceeded that of gold by 100% in the first six months of 2020.
The information in this content has been extracted from reliable sources detailed below.
1-Professional handling of content by the authors of CriptoTendencia.
2-External sources: bitcoinist.com, Tradingview.com and decrypt.com.