The spotlight is once again on the never-ending debate between Bitcoin (BTC) and gold after both assets surged in price while Bitcoin’s properties as a censorship-resistant currency were brought back into focus.
Given gold’s centuries-old status as a safe haven, the precious metal’s rise since Russia’s invasion of Ukraine comes as no surprise. More surprising to some, however, was Bitcoin’s resilience and initial gains, albeit currently followed by a correction.
Bitcoin’s rise since the start of the war has been aided by its emphasis on its role as a sovereign currency that can be transferred and spent independently of any capital controls, restrictions on money transfers, or limits on cash withdrawals, as seen in Ukraine.
These unique properties of Bitcoin were highlighted by the crypto influencer Layah Heilpern during a debate with the founder ofEuro Pacific Capital, Peter Schiffearlier this week, Heilpern pointing out that “Bitcoin is saving people’s lives” in Ukraine.
“You can run away from tyranny […] whatever your government tries to do against you, you can run away from it with the keys in your head. No one needs to know what you own, and I certainly won’t run away from any dangerous government with gold bars,” Heilpern told Schiff during the debate.
Schiff, on the other hand, hit back with his usual arguments, saying Bitcoin has “no underlying value” and the fundamental picture is “very bright for gold” right now.
Price of gold (in blue) and Bitcoin (orange) since 2020:
Gold-Bitcoin Combination Balance
And while Peter Schiff remains one of the most notorious bitcoin skeptics in the investment world, others seem to be taking a more outspoken approach.
Among them, charlie morrisfounder of digital asset data provider ByteTreewhich in comments shared with Cryptonews.comsaid that “optimizing the mix between gold and Bitcoin is essential” for investors who want to hedge against inflation.
“As tensions in Russia and Ukraine unfortunately escalate, gold is rising again, as it normally does in a difficult geopolitical environment. This is a well-established stock, enjoying a boost of interest in times of stress,” Morris said.
However, the founder of ByteTree believes that if the difficult periods multiply in the future, there will also be good times. And Bitcoin performs generally well during these times, thanks to its correlation with risky assets such as tech stocks, he noted.
Therefore, finding a balance between Bitcoin and gold in a portfolio is important, Morris explained, while highlighting his company’s Bold Index, described as an inflation-hedge strategy that allocates both Bitcoin and Gold based on the volatility of each asset.
For now, the debate over the best inflation hedge and store of value remains open, although the investment community has certainly seen a trend of more traditional investors embracing the new digital gold.
Nonetheless, there is no doubt that gold remains a far more important asset than bitcoin, or the entire digital asset space for that matter.
But although the market capitalization of gold is still far from being threatened by Bitcoin, members of the crypto community are under no illusions that Peter Schiff will change his mind about what he is. call it “fool’s gold” anytime soon. One commentator expressed what many suspect, saying:
“The reality is that Peter sells gold. Layah does not sell Bitcoin. Which information is more likely to be accurate. That of the seller, or that of the person fighting for individual freedoms.”
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