Peter Schiff says weak dollar approaches “Willie E. Coyote moment”
2 min readWeak dollar seems to be worth the ATH of gold, which is now in the process of discovering the price. This could also have a positive effect on Bitcoins (BTC) in the medium term due to the correlation between the two assets.
In trading, the term price discovery refers to the moment when the price of an asset exceeds its previous historically highest value. With gold now looking for a new peak and its momentum remaining strong, traders expect the asset to continue to appreciate until a clear level of resistance is established.
A weak dollar is good for gold and maybe bitcoins
According to Peter Schiff, chairman of SchiffGold and a well-known advocate of gold, the weakening dollar is pushing gold up. Schiff said:
“The price of gold is now over $ 2,000 an ounce for the first time. So far, the vast majority of investors are unaware of the importance of the record low dollar. But as the thousand-dollar milestones fall like dominoes, the severity of the problem will be much broader.”
In recent months, the value of the US dollar has fallen sharply compared to other top currencies. As a result, it has strengthened alternative assets, such as gold.
The weakening dollar may also strengthen the price trend of Bitcoins. OKEx CEO Jay Hao, trader Scott Melker and analyst Mark Wilcox said the dollar’s decline had benefited Bitcoins.
Melker pointed out the inverse correlation between the US dollar and the Bitcoins.
“Bitcoin is a blue line. The dollar is a gray line. Do you see the inverse action?”
Schiff emphasized that gold could continue to increase in value and added:
“No one seems to care about a weak dollar. It will probably stay that way until the fall becomes a crash, which I don’t think will start until the dollar index drops to 80. At the current rate of decline, this level could be broken before the end of the year, possibly by election day. “
Is bitcoin really digital gold?
Gold is identical in many properties to Bitcoin. However, BTC also has other unique features, such as portability. Since the price of the largest cryptocurrency peaked in 2017, the perception of the digital asset as a store of value has continued to improve.
As gold grows to new highs, Bitcoin is gaining more interest from institutions and is constantly associated with gold. These are all factors that could have a positive effect on the price of BTC in the medium term, especially given the 24% increase in BTC in the last month.
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