The tension is rising between the communities backing the world's two leading stores of value as both gold and Bitcoin (BTC) notched new record highs in trading on Tuesday, a development that has highlighted the precarious state of the U.S. dollar and other fiat currencies amid persistently high inflation.
Mark Cuban, the billionaire investor of Shark Tank fame, expressed his optimism about the cryptocurrency ecosystem during an interview with CNBC on Monday, saying that despite what many media outlets would have you believe, the rally for BTC is driven by economic principles and not just FOMO and hype.
“Bitcoin in particular, and Ether, to a smaller extent, Bitcoin is just driven by supply and demand,” Cuban said. “There’s only going to be 21 million of them. The more people that buy, and the fewer people that sell, that means the price is going to go up. That’s just the nature of it.”
“It’s a great store of value; that’s why I have an investment in it, because I do feel that the demand is going to exceed the number of people selling,” he added.
Cuban went on to highlight what he sees as the biggest barrier to wider crypto adoption – the absence of a ‘killer app’ that is widely embraced by people of all ages, including grandparents. He said the industry is in dire need of an app that even seniors would feel the need to use just because everyone else does, while also using the line of thought to take a dig at the yellow metal.
“We need that transitional application for crypto to be ubiquitous,” he said. “But until then, just from an investment perspective, I’m investing in Bitcoin over gold all day, every day.”
Noted gold bull Peter Schiff pushed back against Cuban’s statements and his dismissive attitude towards the world’s oldest store of value, tweeting, “Despite gold's $33 rise today, hitting its highest price ever during U.S. trading hours, the only time I heard #gold mentioned on #CNBC was when @mcuban said he wasn't buying any. He boasted that he "chooses #Bitcoin over gold every day." This shark is swimming in the wrong tank.”
Schiff was likewise incensed by the praise that Michael Saylor got for announcing plans for a $600 million debt offering by MicroStrategy that would be used, in part, to purchase more Bitcoin to be held on the company’s balance sheet.
#CNBC's @davidfaber just praised @saylor for his decision to borrow another $600 million to add more #Bitcoin to $MSTR's already leveraged balance sheet. I'm not sure what's worse, Saylor doing it or Faber praising it. At least @jimcramer was skeptical about the pre-announcement.
— Peter Schiff (@PeterSchiff) March 5, 2024
Further lamenting the attention focused on BTC at the expense of the yellow metal, Schiff tweeted, “#Gold just traded at a new all-time record high above $2,140. I wonder if anyone on #CNBC will notice.”
In response to his objections to the coverage of BTC while gold goes unmentioned, X user Wicked posted the following chart looking at gold price relative to BTC, saying, “Gold's about to mint new all-time lows priced in terms of #Bitcoin (the future global unit of account). It's a new world, Peter. Try to keep up.”
Last week, as the hype around BTC potentially hitting a new ATH was building, Schiff warned, “There is an old saying that markets take the stairs up and the elevator down. With #Bitcoin, it's a bit different. Bitcoin takes the elevator up and then jumps.”
Indeed, Bitcoin does have a history of sizeable corrections after hitting new highs, and Tuesday’s price action saw the top crypto plunge 14.6% to a low of $59,225 after hitting a new record high.
BTC/USD Chart by TradingView
BTC bulls have since pushed it back above $62,700, but it remains to be seen if its price continues to correct further, trades sideways, or resumes its uptrend moving forward.
With inflows into spot BTC ETFs continuing to hit new records, many analysts are predicting that the latter will be true and BTC will resume its uptrend in short order.
Volume for the bitcoin ten is really intense again today, over $6b traded (for context, that's more than $MSFT has traded) with couple hours left to go. Probably going to beat last Wed's record. $IBIT, $FBTC, $GBTC and $BITO are all in Top 15 most active ETFs today. pic.twitter.com/BRRisMkYYd
— Eric Balchunas (@EricBalchunas) March 5, 2024
While the gold vs. BTC debate continues to rage, X user Jacob Canfield noted that the real story here is the decline of King dollar and the unsustainable amount of debt that continues to be printed.
As much as I love seeing #Bitcoin , gold, crypto and stocks breaking all time highs, we need to consider the reason why.
The truth is that the US debt is growing $1 trillion every 100 days and no one is doing anything about it.
We are witnessing the decline of America at our…— Jacob Canfield (@JacobCanfield) March 4, 2024
