Gold Shines as Bitcoin's Safe Haven Status Questioned
Bitcoin Under Scrutiny as Gold Rallies
Gold advocate Peter Schiff has intensified his criticism of Bitcoin, pointing to its underperformance compared to gold's recent surge. Gold reached a new record high, surpassing $3,586, while Bitcoin's strength relative to gold appears to be waning.
Bitcoin's Performance Lagging
Schiff highlighted that Bitcoin, when priced in gold, has fallen by 18% since August 12, dropping from a peak of 37.2 ounces. This decline places it precariously close to bear market territory, just 2% away. Compared to its November 2021 peak, Bitcoin is nearly 16% lower when measured against gold.
This situation bolsters Schiff's argument that Bitcoin is failing to establish itself as a reliable store of value, especially when compared to precious metals like gold.
Gold's Impressive Gains
Gold's recent performance underscores Schiff's viewpoint. TradingView data indicates that gold has exceeded $3,586, marking an all-time high. The precious metal has gained over 36% year-to-date and 42% in the last twelve months.
- Six-month increase: 23%
- Five-year increase: 85%
These figures showcase gold's consistent growth and its reputation as a safe-haven asset.
Bitcoin's Mixed Results
While Bitcoin trades near $110,160, it's down 0.46% in the past day and over 4% in the last month. However, longer-term data presents a different picture:
- Year-to-date gain: 18%
- Six-month gain: 36%
- One-year gain: Over 96%
- Five-year gain: Almost 1,000%
Despite these gains, Bitcoin's recent struggles against gold cast doubts on its ability to serve as a true safe haven.
Analyst Warns of Structural Risks
Bloomberg Intelligence analyst Mike McGlone has added to the concerns, drawing parallels between Bitcoin's chart patterns and those of Dogecoin, suggesting underlying weakness. McGlone argues that Bitcoin might follow a similar cycle to other commodities after sharp rallies.
Supply Cap Not a Guarantee
McGlone points out that Bitcoin's limited supply of 21 million coins doesn't necessarily protect it from broader market risks, especially with the proliferation of competing cryptocurrencies since 2009.
Macroeconomic Vulnerability
McGlone believes that a decline in the U.S. stock market could lead to a rapid devaluation of the cryptocurrency market. He views Bitcoin as susceptible to macroeconomic shocks due to its correlation with risk assets.