The bitcoin price is once again hovering below the $10,000 level, which the bulls see as a buying opportunity and the skeptics take as a chance to make digs. Gold bug Peter Schiff is among the first to pounce and rather than buying is doubling down on his bearish sentiment.
The funny thing is there are similarities between the nascent crypto market and the early days of the gold rush. Schiff is pointing to the market dynamics as a weakness while crypto market leaders are reminding him that gold – a competing store of value that can’t double quite as well as a payment method – isn’t very different after all.
Schiff recently showed signs of thawing to bitcoin after the crypto community gifted him thousands of dollars worth of BTC. But his open-mind was short-lived, and now he’s back to his antics, as seen below.
Bitcoin was a major marketing success for big buyers who got in early. But to really succeed they must dump what they pumped without crashing the price. Doing so requires creating enough FOMO to sucker institutional investors into coming aboard without HODLers jumping ship!
— Peter Schiff (@PeterSchiff) July 27, 2019
Crypto Twitter was quick to let him have it.
Another follower added –
“How he doesn’t get this I have no idea. And when you try and sell your gold back it’s typically at a higher discount than bitcoin.”
Widely followed trader and analyst Luke Martin illustrated this point, pointing to the “asymmetrical upside that still exists for bitcoin.”
Peter McCormack of the What Bitcoin Did podcast seemed to address the hypocritical nature of Schiff’s remarks.
Chainalysis research throws a wrench in Schiff’s theory because bitcoin whales tend to buy on the dips:
“Intensive analysis of bitcoin’s 32 largest wallets, however, shows these fears to be overblown. Our data demonstrates that Bitcoin whales are a diverse group, and only about a third of them are active traders. And while these trading whales certainly have the capability of executing transactions large enough to move the market, they have, on net, traded against the herd, buying on price declines.”
Satoshi Nakamoto, the biggest bitcoin whale of them all, reportedly owns 1 million bitcoins. Meanwhile, there are millions of bitcoins that could be lying at the bottom of a landfill someplace, as one Twitter follower put it. According to Chainalysis research:
“Between 2.3 and 3.7 million bitcoin are lost, reducing market capitalization by between 13% and 22%. Market capitalization could be reduced by a further 35% if illiquid investor holdings are removed from the cap.”
Meanwhile, gold isn’t trading in the most certain of environments, either, and is vulnerable to the whims of the Fed. Gold’s performance hinges largely on how deep the Fed decides to take rate cuts if they in fact decide to lower rates as expected.
— Kitco NEWS (@KitcoNewsNOW) July 26, 2019
As one Twitter follower points out, Schiff’s firm profits from selling gold, unlike bitcoin which is completely decentralized.