Gold Naysayer Is Back with More Bitcoin Chirps | The Home of Altcoins: All About Crypto, Bitcoin & Altcoins

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Peter Schiff is back at it again. Based on recent price movements in the markets, he is saying that Bitcoin has proven itself not to be a safe haven asset. 

The comments come after BTC traded down 7% on the same day that trading tensions escalated between China and the U.S., as well as global stock markets taking a tumble. Other assets deemed to be safe havens, such as the Japanese Yen, Swiss franc, and gold, all moved higher on this day. 

This entire analysis is based on the hypothesis that Bitcoin’s price is negatively correlated to the global economy. In the past, we have seen residents of unstable countries (China and Venezuela, to name two) move their capital into Bitcoin in an attempt to preserve wealth. 

Belief that this theory is the future of Bitcoin is what prompted quotes like this from Schiff: 

“Since last Thursday Bitcoin has lost more value than any of the major stock market indexes, while gold and silver have gone up.”

Having long been a Bitcoin denier who constantly touts gold/silver over crypto, it has become Schiff’s modus operandi to make negative comments about Bitcoin whenever there are market movements. The one issue with this argument is the bias he must have from owning a company that helps facilitate the purchase of gold. 

A New Paradigm

However, it is hard to deny that Bitcoin did drop yesterday when it theoretically shouldn’t have. But the theory is the problem. As some Twitter users pointed out, Bitcoin is an uncorrelated asset, not a negatively correlated one. 

That means that price predictions for Bitcoin are that the price will continue to go up rather than the price will go up only if the global economy goes down. From many users perspective, the past decade and the coming decade are all the adoption phase for Bitcoin where the price will increase to its true value. After that, it will be a construct unto itself. 

And as often happens on Twitter, user “Parabolic Trav” jibed to Schiff: 

“If you try to fit it into the legacy financial analysis box, you’ll be rekt Which is what you are Pete!”

This is normal discourse for the platform, but does reflect an alternate take on how those who invest in Bitcoin see it. Rather than thinking of it as fitting into the paradigm that consists of stocks, bonds, commodities, and real estate, it should be viewed as a step to the side from those asset classes. 

Mining for Security

One of the many reasons Bitcoin is seen as so important is because of its heightened security. It was just reported that Bitcoin miners had earned $14 billion securing the network. Along with the exorbitant cost for the electricity required to maintain Bitcoin, this seems like a steep price tag for a secure network. 

However, as the hash rate has increased, it has become more difficult for any government or network to topple Bitcoin. This adds value to the network, since the coin can’t be compromised. 

This type of security, an uncompromisable and impossible to counterfeit coin, is exactly what Peter Schiff doesn’t understand about Bitcoin, and why his analysis always seems so biased.