As the Russian Orthodox Church celebrates Christmas Day today (January 7), Bitcoin HODLers around the world are celebrating the fact that Bitcoin is now trading at the highest level it has been since 20 November 2019.
According to data from CryptoCompare, Bitcoin started the year at $7,174. Since then, it has gone up almost 10% since it is currently (08:40 on 7 January 2020) trading at $7,888, up 4.65% in the past 24-hour period:
This surge toward the $8K level has reversed the losses suffered during the past seven weeks, and it has brought the Bitcoin price to where it was on 20 November 2019, as you can see in the three-month price chart shown below:
Within the crypto community, there are three competing explanations for the great start to the year that Bitcoin has enjoyed:
- It only makes sense that Bitcoin is rising in value since it is a macro hedge asset just like gold, and that's why escalating geopolitical tensions are helping both of these assets to rise in value during the past few days.
- Bitcoin has not demonstrated yet that it is a macro hedge asset and that its recent rise in value is caused by speculators buying Bitcoin in the hope that Bitcoin will soon be viewed as a safe haven asset just like gold, which would mean an increase in demand for Bitcoin in the future.
- The next Bitcoin block reward halving, which is expected to occur on 13 May 2020, has not been fully priced-in, and that this surge in the Bitcoin price is due to the fact that we are getting closer to the halving and more people are becoming aware of what this means.
One man who remains highly skeptical of Bitcoin despite Bitcoin outperforming gold in the first week of 2020 (and more importantly despite admitting that Bitcoin was the top performing asset of the previous decade) is gold bug Peter Schiff, who is the CEO of Euro Pacific Capital and Chairman of SchiffGold.
Here is what Schiff said on January 2:
Continuing the Dec. trend all asset classes are rising except Bitcoin. #Bitcoin may have been the best preforming asset of the last decade, but it's already the worst performing asset of this decade. While I think U.S. stocks will soon drop, I think Bitcoin will fall even faster.— Peter Schiff (@PeterSchiff) January 2, 2020
This is what he had to say on January 3:
Heightened geopolitical risk has resulted in both gold and Bitcoin moving higher, but for different reasons. #Gold is being bought by investors as a safe haven. #Bitcoin is being bought by speculators betting that investors will buy it as a safe haven.— Peter Schiff (@PeterSchiff) January 3, 2020
And finally, this is Schiff tweeting about Bitcoin yesterday:
For those Bitcoin bugs excited about Bitcoin's 4% rally in 2020, think about this. #Gold is also up by about the same percentage this year, only with significantly less downside risk. If this is the best rally #Bitcoin can muster, how will it ever hit 50K, let alone 1 million?— Peter Schiff (@PeterSchiff) January 6, 2020
Schiff has undoubtedly said many silly things about Bitcoin in the past, but it is hard to argue with his assertion that Bitcoin is "being bought by speculators betting that investors will buy it as a safe haven."
Here is what highly-respected macroeconomist and crypto analyst/trader Alex Krüger says about this comment by Schiff:
This is the first sensible thing I see permabear Peter say in ages.— Alex Krüger (@krugermacro) January 3, 2020
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