- Bitcoin secured a market capitalization of $1 trillion this week.
- The bull run was catalyzed by a $1.5 investment by Tesla.
- Gold bugs like Peter Schiff remain skeptical.
It’s been a huge week for . The digital currency secured over a trillion dollars in market capitalization this week, making up the bulk of the crypto market's total market capitalization of $1.7 trillion.
The currency’s recent success has also put the gold-Bitcoin ratio at an all-time low, meaning that the price of gold relative to Bitcoin is the lowest it’s been since Bitcoin came into existence. This is an encouraging sign for those who have long argued that Bitcoin may be a superior store of value to gold.
Bitcoin’s high prices caught the ire of a gold bug—and the defense of a newly-formed Bitcoin bull.
Bullion dealers are on the defensive
Schiff Gold chairman and precious metals dealer Peter Schiff jumped on a tweet published yesterday by Elon Musk, in which the Tesla CEO echoed verbatim a tweet he wrote before Christmas, saying: “Bitcoin is almost as bs as fiat money.”
Musk’s tweets to his 47.4 million followers influence crypto prices dramatically, and he often engages with others in dialogue over crypto. In fact, a tweet exchange with MicroStrategy CEO Michael Saylor may have inclined the Tesla man towards Bitcoin in the first place.
Schiff managed to lure Musk into a conversation about comparing gold with Bitcoin as a store of value. Schiff replied to Musk that, “I agree, I just think Bitcoin, which is digital fiat, is even more BS than the paper fiat issued by central banks. #Gold is not BS. It's real money and better than both!”
The Tesla CEO replied to Schiff by saying “An email saying you have gold is not the same as gold. You might as well have crypto”:
Musk reasoned that money in both instances is “just data that allows us to avoid the inconvenience of barter.” He went on to say: “That data, like all data, is subject to latency & error. The system will evolve to that which minimizes both.”
Musk is implying that technologies such as Bitcoin, beefed up by cryptographic security, could provide more error-free ways of recording value than the systems we currently have in place—perhaps even better than an email from Schiff Gold saying that you have gold.
Musk and Bitcoin: an ambiguous story
The world's richest man has stood as a powerful symbol for the growing institutional adoption of Bitcoin since Tesla disclosed last week that it had converted $1.5 billion of its balance sheet into Bitcoin.
This week in particular though, Musk has toned down some of his bullishness about crypto. On Friday he tweeted: “Tesla’s action is not directly reflective of my opinion. Having some Bitcoin, which is simply a less dumb form of liquidity than cash, is adventurous enough for an S&P500 company.”
Musk then tweeted verbatim the same words he tweeted before Christmas last year, that “Bitcoin is almost as bs as fiat money. The key word is almost.”
Musk hasn’t always been subtle about his crypto bullishness. At the end of January, he changed his Twitter bio to say ‘Bitcoin’. He has also shared bullish memes about Dogecoin with KISS bassist Gene Simmons and rapper Snoop Dogg.
Musk’s current Twitter display picture of an anime girl with laser eyes is another not-so-subtle nod to Bitcoin. The laser eyes are a form of social media signaling among Bitcoin holders. Coinshare executive Meltem Demirors and MicroStrategy CEO Michael Saylor are currently sporting them on Twitter, among others.
Though Musk’s been trying to be more measured in his recent thoughts about crypto, his bullish vibes are coming through loud and clear.