Global markets have entered another volatile phase yet again. Stocks are sliding, and geopolitical tensions (particularly the renewed trade tensions between the US and China) are driving uncertainty. In this climate, gold has soared to new record highs above $4,000 per ounce, silver has surpassed $50, while Bitcoin has dropped by roughly 8% in the last 7 days.
Veteran investor, long-time gold supporter, and Bitcoin critic Peter Schiff believes the recent split between the two assets confirms his long-standing view that Bitcoin is not digital gold. But is he right?
Gold’s historic breakout
Gold’s latest jump to record highs has caught many experts off guard. For the first time ever, it has closed above $4,000, which may indicate a possible shift in investor sentiment. The rally is likely being driven by several key factors:
- Lingering concerns about inflation, despite data suggesting it is cooling
- Sustained accumulation by central banks, more so in emerging markets seeking to diversify away from the US dollar
- Flight to safety amid stock market volatility and renewed trade tensions
This last part is especially noteworthy since it’s the most up-to-date development. Namely, a few days ago, US President Donald Trump threatened to impose 100% tariffs on China’s US-bound exports, starting on November 1. The news alone was enough to crash the crypto market, but gold went in the opposite direction and reached a historic high.
Related: Crypto Markets Bleed as Trump Escalates Tariff War With China
Why gold is breaking out today
Schiff argues that gold’s strength in the face of a rising dollar is particularly telling. Traditionally, gold and dollar move inversely, but their simultaneous rise indicates global investors are seeking a hedge not just against inflation, but also as insurance against bigger problems in the global financial system and waning confidence in US fiscal policy.
While gold and silver have broken records a few days prior, Bitcoin has moved in a different direction, falling sharply alongside the Nasdaq and tech equities. The long-time gold supporter calls this proof that Bitcoin behaves as a risk asset, not a safe-haven store of value.
Peter Schiff on Bitcoin’s current struggles
Commenting on last week’s happenings, Schiff said: “Bitcoin did not rally today. Gold and silver went up. Bitcoin went down… it went down just like the Nasdaq, only it went down, more.”
He argues that because Bitcoin tends to move in sync with other risky investments, it can’t truly be considered a new form of gold. Some of the recent events do show Bitcoin’s increasing sensitivity to global liquidity fluctuations.
Additionally, Schiff challenges the notion of Bitcoin’s scarcity. He points out that while the 21 million coin limit is often cited as proof of limited supply, each Bitcoin is divisible into 100 million satoshis, making its perceived scarcity a man-made illusion. On the other hand, gold is naturally scarce and irreplaceable in industrial and monetary functions, something no digital token can replicate.
Related: Peter Schiff Says BTC Should’ve Hit $148K to Match Gold’s Record High, Terms Rally a Bear Bounce
Deeper economic worries
The veteran investor notes that gold’s meteoric rise is not necessarily good news for the economy, since gold spikes when confidence in fiat money erodes. Schiff criticizes mainstream financial media for failing to connect the dots, saying they attribute gold’s rise to European inflation fears or market technicalities, while ignoring the underlying signal – the world is losing faith in US fiscal credibility.
Trump’s renewed trade war rhetoric, expanding deficits, and threats to Federal Reserve independence are all, in Schiff’s view, accelerating the de-dollarization trend. Central banks are offloading US debt and replacing it with gold, a pattern that has intensified since 2022.
This, he says, is why gold’s rally has been driven primarily by institutional and sovereign demand, and not retail investors.
Where Bitcoin’s near-term risks sit
Interestingly, Schiff concedes that the media’s newfound attention to gold might trigger short-term corrections, but he believes these will be minor.
With central banks still being net buyers, retail investors only beginning to enter, and Wall Street recommending gold exposure again, he sees the rally as being in its early stages.
In contrast, he warns that Bitcoin’s ETF-driven demand could quickly reverse. Should investors begin redeeming ETF shares en masse, the lack of liquidity in the spot market could trigger a steep decline – a “roach motel” scenario where “money checks in, but not much of it checks out.”
Related: U.S. Shutdown Stalls 90 Crypto ETF Approvals in October, Freezes $10 Billion in Inflows
The safe haven divide
Schiff’s vigorous advocacy for gold and his skepticism toward Bitcoin represent two fundamentally different philosophies regarding monetary security.
He views gold as the definitive safeguard against fiscal irresponsibility, geopolitical turmoil, and a loss of confidence in government-issued currencies. However, despite its technological advancements, he sees Bitcoin as more like a risky tech stock than a stable place to store wealth.
For now, Schiff’s gold-first philosophy seems to be gaining traction, but as younger, tech-savvy investors mature and financial systems evolve, the debate between gold and Bitcoin is far from settled and is likely just heating up.
Additionally, the stock market and crypto industry are starting to recover once more, after Trump softened his stance against China in connection with his 100% tariff threat. Bitcoin saw some small gains, as did some other major cryptocurrencies (such as XRP, for instance).
Related: XRP May Be Bullish, But Gold Backing Is Not on the Table
This does point to a wobbly standing of cryptocurrencies, playing into Schiff’s views of Bitcoin being a risk asset that goes up or down depending on what one person says (in this case), even if that person is the US President.
In the end, Schiff continues to insist that when a real crisis hits, investors flee to what they can touch, not code. Nonetheless, his critics argue that Bitcoin’s volatility doesn’t negate its long-term hedge potential, as they point to Bitcoin’s finite supply, censorship resistance, and ability to operate outside traditional banking systems.
Related: Peter Schiff Says Bitcoin Is in ‘Stealth Bear Market’ When Priced in Gold
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