Peter Schiff questions the market’s Bitcoin obsession as gold hits record highs

The yellow metal recently breached the $2,630 mark, setting a new record high, but Peter Schiff, the well-known gold defender, worries that investors are not paying attention.

According to him, the market’s obsession with Bitcoin (BTC) has overshadowed the critical signals that gold sends about the state of the economy.

Schiff denies Bitcoin attention

“With so much attention focused on Bitcoin, investors are missing out on gold’s gains and the importance of its rise,” Schiff tweeted on September 23, adding that inflation is poised to rise due to of a loose monetary policy.

Often referred to as “digital gold,” the number one cryptocurrency has seen modest gains recently. However, the veteran stockbroker remains unimpressed, arguing that the cryptocurrency is far from reaching its previous highs and continues to trade in a narrow range.

He further suggested that the largest cryptocurrency was unwittingly helping to cover economic strategy mistakes allegedly made by the US Federal Reserve. “Bitcoin is the best thing to happen to the Fed as it takes the spotlight off gold, which would otherwise expose its policy mistakes,” the trader said.

Despite BTC’s critic’s warnings, many in the market see it as a legitimate alternative to gold. For example, in response to Schiff’s claims, a crypto analyst known only as “Noodles” said there is a special “accordion-like” relationship between the two commodities. It means that a correction in the precious metal could indicate a rally in the cryptocurrency.

Is gold a better hedge against inflation than Bitcoin?

However, crypto detractors are adamant that BTC is not a good hedge against inflation due to its volatility and speculative nature. He noted that while gold is on track for its best year since 1979, the crypto asset has yet to retest its previous all-time highs.

Gold is rising not only because of the inflation the Fed created in the past, but in anticipation of the much greater inflation the Fed will create in the near future.

In his view, cryptocurrency is more of a distraction than a solution. The advocate of free markets has urged investors to pay more attention to the historical significance of gold’s movements.

This is not Schiff’s first attempt to downplay BTC. However, the founder of Euro Pacific Capital has a spotty record when it comes to his BTC predictions.

In May, he claimed that spot Ethereum ETFs would be bad for the trillion-dollar crypto, as investors would use their BTC allocations to buy the ETH ETFs. At the time, Bitcoin was trading above $70,000, which at the time was the highest it had been in six weeks.

Another time, he referred to BTC as “fool’s gold”, after the currency stumbled in the market as it reacted to the geopolitical tensions between Iran and Israel.

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