Bitcoin (BTC) has shown it is not a safe haven asset, gold bug Peter Schiff has said after the largest cryptocurrency dropped 7% in daily trading.
In a tweet on Aug. 28, Schiff, who has become increasingly known as a Bitcoin critic, claimed BTC/USD dipping below $10,000 once again on Thursday put pay to theories it functioned as a hedge against fiat volatility.
Schiff: Bitcoin “failed safe haven test”
“Bitcoin has again failed the safe haven test. On Friday, as escalating trade tensions sent global stock markets plunging, investors sought refuge in monetary safe havens. The Japanese yen, Swiss franc, and especially gold all moved higher. Yet Bitcoin plunged by more than stocks!” he wrote.
Schiff was referencing a popular theory about Bitcoin investment habits which has surfaced over the past two months.
Against the background of the United States-China trade war, tensions in Venezuela and unrest in Hong Kong, commentators declared Bitcoin offered an option to preserve wealth for those in affected regions.
As Cointelegraph noted, overall Bitcoin network volatility hit new two-month lows last week.
Now, however, the fresh move down spurred critics such as Schiff, who continued:
“Since last Thursday Bitcoin has lost more value than any of the major stock market indexes, while gold and silver have gone up.”
His argument, however, was lost on Bitcoin proponents. Responding, the Twitter account known as Parabolic Trav rebutted Schiff on Bitcoin’s intrinsic value.
“Why on earth would Bitcoin be a safe haven? Bonds are the safe haven in the current paradigm. Nor is gold a safe haven,” he wrote.
The bonds comments came as the U.S. Treasury Secretary, Steven Mnuchin, revealed the government was considering ultra-long bonds of 50 or 100 years.
In an event which could have contributed to Bitcoin’s fall, issuance of such bonds would decrease borrowing costs for Washington and limit taxpayer exposure to the U.S.’s almost trillion-dollar annual budget deficit.
“Bitcoin is simply, over time, ‘number go up,’” Trav meanwhile continued in an attempt to deflate Schiff. He concluded:
“If you try to fit it into the legacy financial analysis box, you will be rekt Which is what you are Pete!”