While the price of Bitcoin (BTC) is rising, gold prices are losing more value day by day. There has been a linear correlation between the gold and the bitcoin price before, and this definitely causes confusion for investors. Famous gold investor and Bitcoin enemy Peter Schiff explained why the market is now in such a split.
The recent rise of Bitcoin relative to #gold in no way proves that #Bitcoin is a superior store of value. Exuberant investors are flocking to risk assets and shunning safe-havens world-wide. As the riskiest asset of them all, Bitcoin is being bought as part of the risk on-trade.
— Peter Schiff (@PeterSchiff) November 16, 2020
Gold crashes as Bitcoin rises
Well-known Bitcoin critics such as Schiff were also hit by the ball after the BTC / USD pair rose to the $ 16,400 level. Schiff stated that experiencing such a situation does not mean that Bitcoin is superior to gold. So why did investors suddenly flock to digital gold Bitcoin instead of gold?
Schiff, CEO of Euro Pacific Capital, stated that “excited” investors are now flocking to risky assets and avoiding investments that are seen as safe haven assets. Describing Bitcoin as the most risky asset among them, Schiff implies that this is the reason why BTC is preferred over gold investment.
Indeed, with the news of the Coronavirus vaccine that came one after another, a general decrease in gold prices began to be seen. First, Pfizer’s vaccine that provides 90% protection, then Moderna’s vaccine, which provides about 95% protection, accelerated this decline.
Will gold prices continue to fall?
Dan Tapiero, a renowned global fund manager and investor, thinks the economic situation is still bad, despite the vaccine news. Tapiero emphasized that the markets will need support again and the economic recovery in the short term will slow down again. According to the famous investor, those who benefit the most from this situation will be gold and Bitcoin.
Expect more liquidity injections from central banks.
Short term economic activity will slow again as caution returns.
No view on covid, only on people's response to it.
— Dan Tapiero (@DTAPCAP) November 16, 2020