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The recent movement from Bitcoin which has seen it struggle to rise higher than $12,000 after a rally sent it in on a bullish turn, has seen well-known Gold bug Peter Schiff weigh in on Bitcoin's potential.

The major cryptocurrency is now falling again and the price has dropped to near on $9,400 which leads Schiff to believe that the argument that Bitcoin is a safe haven in the face of global financial uncertainty is over. 

Bitcoin was being touted as a safe haven when there was news emerging globally that financial uncertainty was abound, and that a potential recession was looming. The US and China were locked in a trade war; the European Central bank took a dovish turn; even the UK’s Brexit moves were causing tension.

All the while, Bitocin was breaking away and rising in price which led people to make the assumption that Bitcoin was reacting to the poor global economic standpoint and showing how it had negative correlation to financial uncertainty. 

Through this, Schiff was always of the opinion that this was entirely untrue, and now, with the latest drop in price, the fan of investible gold feels he has been vindicated. 

Failed the Test

As Bitcoin again fell below the $10,000 mark, struggling to break this bearish trend, Schiff tweeted how he believed the coin had failed the safe haven test. 

“Bitcoin has again failed the safe haven test. On Friday, as escalating trade tensions sent global stock markets plunging, investors sought refuge in monetary safe havens. The Japanese yen, Swiss franc, and especially gold all moved higher. Yet Bitcoin plunged by more than stocks!” he wrote.

Schiff went on to put Bitcoin recent poor performance into context as he added: 

“Since last Thursday Bitcoin has lost more value than any of the major stock market indexes, while gold and silver have gone up.”

Counterpoints

While Schiff’s argument does hold water in terms of the safe haven aspect, Bitcoin believers were quick to interject and try to explain the real role of Bitcoin as an alternative market. 

One twitter user responded to Schiff stating: 

“SHORT TERM movements DO NOT imply LONG TERM trends for bitcoin or ANY other ASSET. Peter Schiff do you KNOW the DIFFERENCE between CLIMATE and WEATHER?”

Additionally,  twitter users Parabolic Trav also countered Schiff’s argument on Bitcoin’s intrinsic value.

“Why on earth would Bitcoin be a safe haven? Bonds are the safe haven in the current paradigm. Nor is gold a safe haven,” he wrote.

Too volatile to be safe?

It is hard to pinpoint exactly why and how Bitcoin is moving in the way that it is, and if it has anything to do with global financial uncertainty. But one aspect of a safe haven that most people associate is a lack of volatility and a stability in the face of any occurance. 

Bitcoin has shown, over its time as an investable asset, it is highly volatile and prone to big moves up as well as down. It may be able to work in negative correlation at times of uncertainty, but it also moves with great gusto in both directions making it hard to put a steady value and reliance on.

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