Stockbroker and gold expert Peter Schiff's animosity against bitcoin is well known. However, Schiff has basically admitted that the king of cryptocurrencies recently challenged his bearish portents. Given that bitcoin has erased gold returns to date, such a conclusion should be obvious.
'I was wrong about Bitcoin'
The debate on Twitter between bitcoin hater Peter Schiff and Gemini co-founder Tyler Winklevoss on Sunday (September 6) was quite interesting. The two were talking about bitcoin's rally to $ 12,000 and the subsequent drop below $ 10k. According to Tyler, $ 10K is now the new baseline because bitcoin didn't spend too long below that level. He also noted that the benchmark cryptocurrency is now consolidating ahead of the next big move.
For Schiff, however, bitcoin is consolidating before the next crash. “Consolidations after sharp moves generally continue with the move that follows. The more the 10K support level is tested, the weaker it becomes. Markets rarely give investors so many opportunities to buy the fund ”, explained.
A Twitter user with the alias sharkybit online weighed in on the conversation, attaching a screenshot from July 5 in which Schiff had predicted that bitcoin would crash as gold rallied.
After being called in for his failed bitcoin forecast, the gold proponent admitted he was wrong about bitcoin. Furthermore, he posited that bitcoin's rise to $ 12K was fueled by extensive television commercials made by investment firm Grayscale and the bullish rally in gold.
However, Schiff is not fully moving on his bearish stance on bitcoin. He went on to say that bitcoin's recent drop to $ 10K means that the bear market has returned.
I was right on #gold, but wrong on #Bitcoin. The latter did managed to get through resistance and rally up to $ 12K, thanks in large part to a ride on gold’s coattails and a massive TV advertising buy by Grayscale. By falling back to $ 10K Bitcoin quickly returned to a bear market.
– Peter Schiff (@PeterSchiff) September 6, 2020
Schiff's logic is flawed
As mentioned above, bitcoin's gains this year outnumber gold's. Bitcoin is currently hovering around $ 10,200. It has recovered 41.65 percent since the beginning of the year, according to data provided by blockchain analytics firm Skew. By comparison, the precious metal rose roughly 27.22 percent in the same time period.
Although bitcoin is down more than 20% from the high of $ 12.5K in early August, its status as a possible substitute for gold is solidifying. In addition to outperforming gold year-over-year, experts have poignantly pointed out that the flagship cryptocurrency is becoming a better store of value than gold.
Where to now?
While Schiff theorizes that Bitcoin touching the $ 10K level implies that it is due to a deeper pullback, other crypto experts are observing that the asset's resilience is an indication that an exponential rally could be on the horizon.
Three Arrows Capital hedge fund CEO Su Zhu was genuinely surprised by Bitcoin's ability to hold above $ 10,000. Zhu suggested that this simply means that the top cryptocurrency is more likely to rise rather than crash.