Chinese State Media Claims Bitcoin Bull Market Could Put Pressure on Gold
The report, which appeared on China Central Television (CCTV), apparently claims that a Bitcoin bull market may put long term downwards pressure on gold. The broadcast was retweeted by 8BTC founder Red Li, and entrepreneur Qiao Wang from DeFi Alliance.
Chinese state media is saying the BTC bull market may cause long-term downward pressure on gold.
This is just incredible. https://t.co/1LaulhHzvK
— Qiao Wang (@QwQiao) December 13, 2020
The state regime in China remains staunchly against Bitcoin and cryptocurrencies as it rolls out its own central bank digital currency (CBDC/DCEP). Wang commented;
“It’s truly incredible if you think about it. A decade ago we started printing a digital ledger which today is still less than 1 terabyte that’s sucking the life out of an element on the f****** periodic table that has existed since the dawn of universe…”
It appears that the broadcast has quoted from a JP Morgan statement claiming that Bitcoin could be an alternative to gold.
Bitcoin Outperforming Gold in 2020
A recent Digital Asset Fund Flows report from ETF provider CoinShares also suggested that investors have been pulling out of gold markets and entering Bitcoin based investments.
Comparing the performance of the two safe haven assets shows there is clearly only one winner. Since the beginning of 2020, and before the Covid pandemic really rattled the global economy, gold prices have gained 21% to current levels according to Goldprice.org.
Bitcoin on the other hand has surged 165% over the same period to today’s prices of a touch over $19,000.
Despite this glaringly obvious divergence in asset performance, argent gold investors such as Peter Schiff remain unconvinced;
“The latest Bitcoin marketing gimmick is that lots of private and public companies are trading in their gold and accumulating Bitcoin as their preferred store of value. Those few companies that are buying Bitcoin did not do so by selling their gold. Bitcoin is not the new gold.”
Bigger Corrections For Precious Metals
If gold truly was the better asset, then it would have made more than a mere 20% in a year when financial markets have been battered and store of value assets should have skyrocketed.
Even silver has managed to outperform gold over the past 12 months gaining around 34% since January first. However, both precious metals have corrected heavily since early August with gold dropping 11.3% and silver losing 18.6% since their peaks this year.
Bitcoin’s pullback since its 2020 high has been just 4% to current prices so the figures really do speak for themselves.
