The gold bug still thinks Bitcoin’s drop to $10K indicates a bear market.
Gold bug Peter Schiff, who has often spoken out against Bitcoin, may be admitting that there’s at least some flaw in his predictions after acknowledging the coin did not “collapse” as gold rose to a new all-time high last month.
In a Twitter exchange with Tyler Winklevoss, which began Sept. 6, Schiff traded words with the Gemini co-founder regarding Bitcoin’s rise to a yearly high of more than $12,000 on Aug. 17 and its dip under $10,000 just last week. While Winklevoss predicted the digital asset’s baseline for all future dips would be $10,000, Schiff was decidedly more bearish, stating Bitcoin (BTC) could 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 wasn’t willing to let the gold bug’s word slide, posting a screenshot of Schiff’s July 5 prediction that the price of Bitcoin would drop as gold surged.
“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, the one-month correlation between gold and Bitcoin reached a record high of 68% in early August. As of this writing, the price of gold is $1,934 per ounce, having only dropped 7.1% since reaching an all-time high of $2,089 on Aug. 6.
However, Bitcoin is currently valued at $10,251, having fallen 15% since first rising above $12,000 this year on Aug 2. The correlation between the two assets has remained near 0-20% for the last two weeks, briefly dropping to 2.6% on Sept. 2.
Though Bitcoin is at the moment no longer highly correlated with gold, the crypto asset may still be set to become digital gold in 2020, considering the previous price correlations and trends in the futures market. According to Skew, gold has a 27.22% year-to-date (YTD) return, while Bitcoin has racked up a 42.36% YTD yield.