Key Points
- Spot gold prices reach an all-time high, sparking criticism from Bitcoin detractors.
- Despite the criticism, Bitcoin has seen significant gains, outperforming gold by a factor of five.
Spot gold prices have reached a record high, prompting a renewed wave of criticism from Bitcoin detractors.
The price of gold hit a record-breaking $2,304 per ounce on April 3, marking an 11.5% increase since the start of the year, according to the American Hartford Gold Group.
Gold’s Performance and Bitcoin’s Criticism
Gold began to gain traction in mid-February, rising from roughly $2,000 per ounce to over $2,200 by the end of March. This increase was driven by growing global tensions, potential interest rate cuts, and de-dollarization, according to Nanette Abuhoff Jacobson, investment strategist at Hartford Funds.
Despite Bitcoin often being referred to as “digital gold”, the surge in real gold prices has led to renewed ridicule from gold enthusiasts and Bitcoin detractors.
Peter Schiff, a gold bull and Bitcoin critic, claimed on April 3 that Bitcoin was down 7% for the second quarter of 2024, while silver and gold were up 8.7% and 3.4% respectively. However, it’s worth noting that Bitcoin has seen a 55% increase this year, outpacing gold’s gains by a factor of five.
Gold’s Environmental Impact
In another post, Schiff suggested that it might be the “last chance to sell your Bitcoin and buy some gold and silver at favorable prices.” This comment was met with a swift response from the crypto community.
Charlie Morris, an analyst and researcher at Bytetree, also criticized Bitcoin, pointing out that gold had reached its all-time high “without electricity consumption” – a reference to Bitcoin’s energy-intensive mining process.
In response, Daniel Batten, a Bitcoin ESG researcher, highlighted that gold extraction primarily relies on fossil fuels and has a higher environmental impact than Bitcoin mining. He added that unlike gold mining, Bitcoin mining does not contaminate the local land and water supply with mercury or arsenic.
Meanwhile, the 14 leading gold-tracking exchange-traded funds (ETFs) lost $2.4 billion from the start of the year to mid-February. In contrast, spot Bitcoin funds saw an inflow of $3.89 billion over the same period.
Kieran Warwick, the founder of Illuvium, was recently interviewed by a magazine where he answered six questions about his company.
