28 August 2020
The Gold Bug still says that the drop of Bitcoin to $10,000 means it's a bear
Gold bug Peter Schiff, a well-known speaker against Bitcoin, might be implying that his predictions might be at least a little flawed after acknowledging that the Bitcoin didn't exactly “collapse” as last month gold achieved a new all-time high.
On Sept. 6, Schiff exchanged words in a Twitter "debate" with Tyler Winklevoss, the Gemini co-founder, as Bitcoin reached a yearly high on Aug. 17 of more than $12,000, and its fall just last week below $10,000. As Winklevoss predicted that $10,000 will be the baseline for all future dips, Schiff bearishly said that Bitcoin (BTC) might be consolidating before a crash.
“The more the 10K support level is tested, the weaker it gets,” said Schiff. “Markets rarely give investors that many chances to buy the bottom.”
However, Twitter user Sharkybit wouldn't allow the Gold Bug to have the last word, as Sharkybit posted a screenshot of a prediction that Schiff made on July 5 where he implied that as gold price would rise, the value of Bitcoin would fall.
“I was right on gold, but wrong on Bitcoin,” said Schiff. “The latter did manage to get through resistance and rally up to $12K, thanks in large part to a ride on gold's coattails and a massive TV advertising buy by Grayscale.”
“By falling back to $10K Bitcoin quickly returned to a bear market.” According to Skew Analytics, in early August the one-month correlation between gold and BTC reached an all-time high of 68%. The price of gold only dropped 7.1% since reaching a record high of $2,089 on Aug. 6, and currently is $1,934 per ounce.
Moreso, the going value of Bitcoin is $10,251, which is 15% less than the value it had when it first rose above $12,000 on Aug 2. For the last half-month, the correlation between the two assets stayed around 0-20% , only briefly dipping to 2.6% on Sept. 2.
Source: Skew.com Even though Bitcoin is no longer highly correlated with gold at the moment, considering the former price correlations and trends in the futures market, it may still be setting to become digital gold in 2020. According to Skew.com, gold currently has a 27.22% year-to-date (YTD) return, while Bitcoin has achieved a 42.36% YTD yield.