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If you invested $1,000 in gold and Bitcoin after economists declared “cryptocurrency extinct,” you would have this much
American economist Peter Schiff has a long-standing reputation for questioning the sustainability of Bitcoin (Bitcoin) and the general cryptocurrency sector.
His criticisms contradict some financial sector operators who believe in it Bitcoin has the potential to replace gold as a store of value. However, Schiff, a gold fanatic, claims that the superiority of the precious metal is unparalleled.
In fact, the economist used moments of market recession to warn investors to get out of cryptocurrency. One notable case was on November 14, 2022, during a prevailing crypto winter. In a X sendSchiff declared that cryptocurrencies were on the verge of extinction.
“This is not a #cryptowinter. This implies that spring is coming. This is also not a crypto ice age, as that also ended after a couple of million years. This is the extinction of cryptocurrencies. <…> Gold will rise again to drive a new generation of asset-backed cryptocurrencies,” he said.
It is worth noting that from Schiff’s post both raw material have rallied to trade at new all-time highs. At the time of Schiff’s post, Bitcoin was trading at $16,618.20, while gold was valued at $1,776.90 an ounce.
Investing in gold and Bitcoin
Investors who followed Schiff’s advice to stick with gold may now be curious about how their investments have fared. Likewise, those who ignored his warning and invested in Bitcoin may be eager to see the outcome. So, here’s how a $1,000 investment in each asset from the post would play out.
If an investor invested $1,000 in gold on November 14, 2022, they would have purchased approximately 0.5627 ounces of gold ($1,000 / $1,776.90 per ounce). As of June 14, 2024, gold was trading at $2,336.65 per ounce. As a result, the 0.5627 ounces of gold would now be worth approximately $1,314.33. This represents a percentage increase of 31.43%.
If someone invested $1,000 in Bitcoin on the same date, they would have acquired approximately 0.06016 BTC ($1,000 / $16,618.20 per BTC). At the time of writing, Bitcoin was trading at $66,906. The value of 0.06016 BTC would now be valued at approximately $4,023.57, reflecting an increase of 302.36%.
Bitcoin dwarfs gold
Over the same period, a $1,000 investment in gold would now be worth approximately $1,314.33, resulting in a profit of $314.33. In contrast, the same investment in Bitcoin would now be valued at approximately $4,023.57, resulting in a profit of $3,023.57.
Overall, despite Schiff’s strong stance against cryptocurrencies, an investment in Bitcoin has significantly outperformed gold over the same period.
It is important to note that gold has built a reputation as a stable asset that has existed for centuries, while Bitcoin is still in its infancy. It therefore remains to be seen whether Bitcoin will be able to catch up with gold in terms of its role as a store of value in the traditional sector.
Disclaimer: The content of this site should not be considered investment advice. Investing is speculative. When you invest, your capital is at risk.