Peter Schiff against the failed bitcoin rally

Peter Schiff this time shared his opinion on a hypothetical failed bitcoin rally.

On Twitter, Schiff wrote: 

“If Bitcoin can’t rally with an emergency 50 basis point rate cut, plus all of the recent stock, bond, currency and gold market volatility, under what circumstances will it rally? If Bitcoin won’t go up, why own it? The answer to that question is ‘sell'”.

The well-known gold supporter refers to what is happening in recent days in global financial markets, with stock markets in sharp decline and gold expected to behave in the opposite way. 

Taking as an example the S&P 500 index of the New York Stock Exchange as a reference, it started to fall on February 24th and since then has lost about 10% with a first fall ended on February 28th causing it to lose more than 14% and a slight recovery in the following days. 

Gold, on the other hand, on February 24th peaked at about $1,686 an ounce, but then fell to a low again on February 28th to less than $1,570, with a maximum loss of less than 7%. But now it has risen to over $1,640 an ounce, recovering much of the lost ground. 

Bitcoin, on the other hand, while starting to drop on February 24th, recorded a maximum loss on February 26th, when it dropped to about $8,600, and then dropped again on February 28th, to $8,500, as well as on March 1st, when it reached $8,400. 

It is now still more or less in that area, at about $8,700. 

So, although last week the change in the price of bitcoin was in line with that of the stock market first and gold later, this week it seems to have moved away from the other assets again. 

However, what Peter Schiff’s objection focuses on is an alleged failure to rally. Schiff, in fact, seems to suggest that the price of bitcoin should not be unrelated, but inversely correlated, that is, it should rise when the prices of other assets fall and maybe even vice versa. 

However, clearly, it is not, probably because the price of bitcoin is following a trend of its own, perhaps unrelated to the other assets. 

Therefore, if the trend of the price of bitcoin is not inversely correlated to that of the other assets, but unrelated, then the presumed rally to which Peter Schiff makes reference would exist only in his imagination. At this point, it is possible to speculate that even his suggestion to sell might be unfounded. 

Especially because there has already been a bitcoin rally, between January and mid-February, when it went from $8,000 to $10,000, probably due to institutional investors. This rally had been accused of being driven by market manipulation, but a research by LongHash denied it.

The analysis, focusing on the substantial increase in trading volumes, the Grayscale Bitcoin Investment Trust (GBTC) reward and on-chain investor activity, suggests that this rally was actually largely organic, indicating that it was driven largely by the accumulation of bitcoin during this period due to both retail and institutional investors.