Record-Breaking Gold Prices Ignite Bitcoin Debate as Crypto Outpaces Metal's Gains
Summary:
Gold prices have reached an all-time high, leading to heightened mockery of Bitcoin by gold investors. Despite gold's strong performance, Bitcoin has outperformed it, rising by 55% this year. Critics highlight Bitcoin's energy consumption for mining but supporters counter this by noting the environmental impact of gold extraction, predominantly powered by fossil fuels. Regardless, Bitcoin funds have seen significant inflows compared to gold-tracking ETFs so far this year.
Gold recorded its highest ever prices, igniting further ridiculing of Bitcoin (BTC) by investors in the golden metal. On April 3, the American Hartford Gold Group reported that gold had soared to a record-breaking $2,304 per ounce, marking an annual gain of 11.5% for the typically sluggish asset. The momentum for gold commenced in the middle of February, with prices climbing from roughly $2,000 per ounce to more than $2,200 at the end of March. Hartford Funds investment strategist Nanette Abuhoff Jacobson attributes these gains to the stability seen in gold and other safe assets amid increasing worldwide tensions, uncertainty surrounding potential interest-rate cuts and the process of moving away from the U.S. dollar.
Though Bitcoin is often termed as the “digital gold”, the surge in the price of actual gold has led to increased scorn from gold proponents and Bitcoin deniers. Gold enthusiast and Bitcoin critic, Peter Schiff made a claim in an April 3 social media post that Bitcoin was experiencing a 7% downfall while silver and gold witnessed 8.7% and 3.4% rises respectively in the second quarter of 2024, with a comment – “The results speak for themselves.” This post was made just three days into the second quarter, neglecting the fact that Bitcoin had multiplied by a factor of 55 over the year, far surpassing the increases seen in gold over the same duration.
A secondary post made by Schiff suggested that this could be the “final opportunity to swap Bitcoin for gold and silver at considerable rates” and added, “failing to take action could lead to poverty.” This statement, however, provoked responses from crypto traders like “Quasar” who pointed out that they could not “wait another six decades for gold to elevate by $1,500.”
April 3 also witnessed Charlie Morris, Bytetree analyst and researcher, criticising Bitcoin for the vast amount of electricity its mining process consumes, with the backdrop of gold achieving its all-time high. This claim was swiftly countered by environmentalist and Bitcoin ESG researcher Daniel Batten, who argued that the procedures required to obtain gold predominantly run on fossil fuels, which have a significantly larger environmental impact and are responsible for higher emissions than Bitcoin mining that is entirely electric and does not leave harmful substances like mercury and arsenic in the local land and water supply.
From the outset of this year until mid-February, the 14 preeminent gold-tracking ETFs have lost $2.4 billion, in stark contrast to Bitcoin funds that have accrued $3.89 billion during the same time frame.
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Published At
4/4/2024 9:17:34 AM
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