Bitcoin has been an asset compared to gold throughout its history, and for years it has had analogies of “digital gold” or “gold 2.0” because of its price performance. However, critics like Peter Schiff continue to talk about the shiny metal’s advantage, saying that Bitcoin is not a viable alternative to gold.
Gold supporter lists reasons to exit Bitcoin market CEO and chief global strategist of Euro Pacific Capital Inc. Schiff stated in a recent tweet that he offers another example of why the market is lower than Bitcoin’s.
He said that Bitcoin’s rally, which coincided with a pullback on the gold side, is proof of this. He added that the difference in price movements experienced at that time showed that the two were not related at all.
“Today’s big rally in Bitcoin and the pullback in gold provide further evidence that Bitcoin is not digital gold. It has nothing in common with gold and, on the contrary, is negatively associated with gold.”
Based on this, the economist argued that Bitcoin is neither an inflation hedge nor an alternative to gold as a store of value. Schiff also stated that another reason for the recent drop in Bitcoin was the newly signed execution order. He said that White House attention will mean more regulation, which will increase the cost and reduce the attractiveness of Bitcoin.
Notably, Bitcoin has performed worse than gold this year. Year-to-date, gold has increased by 16.36%. Bitcoin fell 31.21% in the same time frame. Gold also reached a new high of over $2,000 an ounce amid inflation concerns.
However, over the past 10 years, Bitcoin has vastly outperformed gold. Bitcoin has a CAGR of 114.71% compared to the 1.66% return of gold.
Bitcoin’s return on investment (ROI) has also greatly outstripped that of gold. Bitcoin has increased by an impressive 773,687% over the past decade, while gold is up 18%.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.