A top investor in gold, Peter Schiff is recognized as one of the most high profile crypto detractors. Even though he remains absolutely resolute in his belief regarding cryptocurrency’s potential to become a strong investment vehicle, he did recently admit making a wrong prediction. He had a Twitter exchange with the co-founder of Gemini, Tyler Winklevoss, over the weekend. The interaction was initiated when Winklevoss pointed out that Bitcoin had seemingly found a new consolidation point, as the asset’s value is now once again comfortable above the threshold of $10,000. According to Winklevoss, this was an indication that Bitcoin was preparing for its next breakout, but Schiff had a different opinion.
The gold bug explained in reply that the reverse could easily happen where Bitcoin was concerned. According to Schiff, as the $10,000 comfort point would be tested repeatedly, it would weaken the pioneer cryptocurrency. It was pointed out by a Twitter user that one of the recent predictions that Schiff had made were about Bitcoin chipping away at a resistance point just above the value of $9,000. The user shared a screenshot from July in which he highlighted that a drop in Bitcoin’s price had been forecasted by Schiff. This was back when gold had been hitting record levels.
Schiff realized his errors and quickly admitted that he had been wrong about Bitcoin. However, this didn’t stop him from bashing the asset, as he said that Bitcoin had only managed to reach $12,000 because it was rising on gold’s coattails and had seen an increase in institutional investors. In recent times, there have been some price correlations between gold and Bitcoin. With stocks and traditional markets taking a hit because of the COVID-19 pandemic, investors have rushed towards alternative assets for hedging and waiting out the storm. Due to the influx of investors, both gold and Bitcoin have surged in the same direction.
The data in early August from Skew Markets showed that the correlation between the two assets in one month had reached 67.1%, which is the highest on record. It should also be noted that the three-month correlation, which is more widely used, was at 15% at that time. As far as Schiff’s statements about Bitcoin’s return to a bear market are concerned, there are already fears that the cryptocurrency may recede. In the past week, Bitcoin has already lost 21% of its value and even went below the value of $10,000.
Most of these losses were recorded on Thursday when there was a 7% decline in Bitcoin’s price, a move that ended up liquidating long positions in the asset of more than $100 million. A surge in the value of the dollar, especially against some of the other reserve currencies, exacerbated the fall even more. According to analysts, the dollar is expected to maintain its surge in the near future, which could end up endangering Bitcoin’s position since investors will once again start flocking towards the greenback. But, there are some analysts who believe that Bitcoin will be able to hold the line.