Contrary to popular opinion, bitcoin has not become a more attractive investment asset compared to gold. At least, that’s what economist Peter Schiff thinks.
GBTC, a bitcoin derivative of the Grayscale fund, closed 36% lower from its 2021 high, according to Schiff on May 13, that is, before another cryptocurrency market crash. But the worst news for investors was that GBTC closed 4% below its 2017 peak. Gold was up 40% over the same period.
The collapse of the cryptocurrency market, initiated by just one tweet from Elon Musk on the night of May 16-17, is also worrying. The event shows that bitcoin should not be seen as an asset or currency because its value is highly dependent on social media sentiment.
The cryptocurrency also fails to establish itself as a store of value – Schiff notes that assets of this class do not lose 30% of their value in a month.
The economist also warns of broader negative trends. The U.S. government is failing to get inflation under control, and budget deficits are widening. The current situation is comparable to 1971, when inflation reached 6 percent, beginning a decade of decline.