The end of the bitcoin party might just come at gold's hand - this according to well known gold supporter Peter Schiff, CEO of Euro Pacific Capital.
While many experts suggest that gold and bitcoin move in tandem, Schiff said it is absolute nonsense. "If you are in bitcoin the last thing you want to see is a big move up in the price of gold," he said in an interview Tuesday.
According to Schiff, once the yellow metal really starts going up it can be "the pin that pricks the bitcoin bubble."
"When people who have been buying digital gold decide they want the real thing and [t]hey want to make the switch, that's impossible. [T]here is no way a significant amount of money can get out without imploding the entire [bitcoin] market," he said. Schiff added that he would not be surprised if bitcoin dropped 80-90% in a single day.
On the gold front, the metal's 60-day historical volatility is near its lowest since 2001, and money managers have cut their bets on a gold rally at the fastest pace in five months.
So are people just bored of gold?
"[S]ome money that might othwerise buy real good is buying this fools' gold instead, it is taking away some of this demand for gold," Schiff said.
But there's another part to the equation, he added.
"The stock market is going up - a lot of people who were buying gold as a hedge think there is no reason to hedge - we have never seen so much optimism about the market, it has never been so expensive and so few people worrying that it is going down."
Bitcoin prices briefly plunged $2,000 within one hour to below $16,000 on Wednesday, before paring losses, after the U.S. stock regulator suspended share trading of cryptocurrency company Crypto Co. (CRCW) on concerns about potential stock manipulation.
Gold and silver prices were ending the U.S. day session moderately higher and scored two-week highs Wednesday. Technically related buying has been featured this week, amid a lack of major, markets-moving fundamental news. February Comex gold was last up $6.40 an ounce at $1,270.60. March Comex silver was last up $0.142 at $16.295 an ounce.
Watch more from Kitco News:
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