The ongoing disputes over bitcoin (BTC) and gold are back in the spotlight as both assets surged after the start of the war in Ukraine and bitcoin’s censorship-resistant properties of money were back in the spotlight.
Given gold’s longstanding status as a financial haven, the rise in the price of the yellow metals since Russia invaded Ukraine is hardly surprising. However, some people were more surprised by the initial resilience and growth of bitcoin, although a slight correction followed as the fighting in Ukraine continued and even intensified.
Notably, bitcoin’s rise since the start of the war has been fueled by a focus on its role as sovereign money that can be transferred and spent regardless of any capital controls, money transfer restrictions, or cash withdrawal limits, as seen. in Ukraine.
These unique properties of bitcoin were highlighted by crypto influencer Laia Heilpern during a debate with the founder Euro Pacific Capital Peter Schiff earlier this week, with Heilpern pointing out that bitcoin is saving lives in Ukraine.
You can run from tyranny [] whatever your government throws at you, you can run from it with the keys in your head. “No one needs to know what you own and I certainly won’t run from any dangerous tyrannical government with gold bars,” Heilpern told Schiff during the debate.
Schiff, for his part, countered with his usual theses, stating that bitcoin has no underlying value and that both the technical and fundamental picture for gold looks very rosy at the moment.
Since war broke out in Ukraine on Feb. 24, the price of BTC has risen nearly 12% to $41,700 as of 12:00 UTC on Friday. And although gold also rose in price, the price increase was much less than that of bitcoin. Since the start of the war, gold has risen 2% to 1947 dollars.
Price of gold (blue line) and bitcoin (orange line) since 2020:
Balance of gold-bitcoin combination
And while Peter Schiff remains one of the most notorious opponents of bitcoin in the investment world, others seem to be taking a more open-minded approach to both bitcoin and gold.
Among them is Charlie Morris, founder of a digital asset data provider. ByteTree which in the comments shared website said optimizing the combination of gold and bitcoin is key for investors looking to hedge against inflation.
As tensions in Russia and Ukraine sadly escalate, gold is back up as usual when geopolitics heat up. It has performed well and is beneficial in times of stress, said Morris, who remains a golden bull.
However, the founder of ByteTree also argued that as there are more bad times in the future, there will be good times as well. He also noted that Bitcoin has performed well in good times due to its correlation with risky assets such as tech stocks.
As a result, it is important to strike a balance between bitcoin and gold in a portfolio, Morris explained, highlighting his own Bold Index his company, described as an inflation hedge strategy that allocates both bitcoin and gold based on the volatility of each asset.
For now, the debate about what is the best inflation hedge and store of value remains open, although the investment community has certainly noticed the trend of more traditional investors using the new digital gold.
In addition, there is also no doubt that gold remains a much larger asset than bitcoin or the entire digital asset space, for that matter.
According to Infinite Market Cap, at the time of this writing, bitcoin’s market cap is approximately $0.83 trillion, while gold’s market cap was much more significant at $12.276 trillion.
By comparison, the entire crypto market was worth just under $2 trillion, according to data from the same source.
But while the capitalization of the gold market is still far from being threatened by bitcoin, members of the crypto community have no illusions that Peter Schiff will change his mind about what he calls fool’s gold anytime soon. One commenter expressed what many already suspected, saying:
The reality is that Peter is selling gold. Layah does not sell bitcoins. Which information is most likely to be correct. A salesman or a person who fights for personal freedoms.
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