The yellow metal recently broke past the $2,630 mark, registering a new record high, but Peter Schiff, the well-known gold advocate, is concerned that investors aren’t paying attention.
According to him, the market’s obsession with Bitcoin (BTC) has overshadowed the critical signals gold is sending about the state of the economy.
Schiff Decries Bitcoin Attention
“With so much attention focused on Bitcoin, investors are missing out on gold’s gains and the significance of its rise,” Schiff tweeted on September 23, adding that inflation is poised to escalate due to loose monetary policy.
Often touted as “digital gold,” the number one cryptocurrency has recently seen modest gains. However, the veteran stockbroker remains unimpressed, arguing that the cryptocurrency is far from reaching its previous highs and is continuing to trade in a narrow range.
Additionally, he suggested that the largest cryptocurrency was unwittingly helping cover economic strategy errors allegedly made by the U.S. Federal Reserve. “Bitcoin is the best thing to have happened to the Fed, as it takes the spotlight off gold, which would otherwise expose their policy mistakes,” the trader said.
Despite the BTC critic’s warnings, many in the market see it as a legitimate alternative to gold. For example, in response to Schiff’s assertions, one crypto analyst known only as “Noodles” said that there is a special “accordion-like” relationship between the two commodities. It means that a correction in the precious metal could indicate a rally in the cryptocurrency.
Gold a Better Hedge Against Inflation Than Bitcoin?
The crypto detractor is adamant, though, that BTC is not a good hedge against inflation because of its volatility and speculative nature. He noted that while gold has been on track for its best year since 1979, the crypto asset has yet to retest its previous all-time highs.
Gold is rising not just because of the inflation the Fed created in the past, but in anticipation of the much greater inflation the Fed will create in the near future.
In his opinion, cryptocurrency is more of a distraction than a solution. The proponent of free markets has urged investors to pay closer attention to the historical significance of gold’s movements.
This is not Schiff’s first attempt to downplay BTC. However, the founder of Euro Pacific Capital has a patchy record when it comes to his BTC predictions.
In May, he claimed that spot Ethereum ETFs would be bad for the trillion-dollar crypto as investors would use their BTC allocations to buy into the ETH ETFs. At that time, Bitcoin was trading above $70,000, which at the time was the highest level it had been at in six weeks.
Another time, he referred to BTC as “fool’s gold,” following the coin’s stumble in the market as it reacted to geopolitical tensions between Iran and Israel.