Gold Beats Bitcoin as Dollar Weakens

• Peter Schiff says Bitcoin is not a hedge, claims gold will benefit instead.
• He argues that converting dollars to Bitcoin worsens dollar weakness and inflation risks.
• Coin Edition defends Bitcoin as a sound money alternative to fiat and central banks.

Economist Peter Schiff has challenged the Coin Edition’s assertion that Bitcoin serves as an effective hedge against dollar weakness. The Dollar Index has fallen below 96.5, prompting Schiff to warn about potential consumer price increases in 2026 without immediate Federal Reserve intervention.

Schiff argues that gold, not Bitcoin, will benefit from continued dollar weakness based on historical correlations and market behavior. He contends that Bitcoin maintains a negative correlation with gold, undermining its effectiveness as a traditional safe-haven asset during currency debasement periods.

The economist suggests that risk asset sell-offs during dollar weakness could negatively impact Bitcoin prices. This view contrasts with cryptocurrency advocates who position Bitcoin as digital gold and a store of value independent of traditional financial systems.

Fed Policy Creates Competing Investment Narratives

Schiff has criticized both political parties for their fiscal and monetary policy approaches, which could exacerbate dollar weakness. He specifically targets Trump’s preference for lower interest rates to reduce government financing costs, arguing that spending cuts would address the root problem more effectively.

The economist claims that purchasing Bitcoin increases pressure on the dollar rather than providing relief. His June 29 post argued that “selling dollars to buy Bitcoin is putting the dollar under pressure” and referred to investing in Bitcoin as a waste of money that is harmful to the nation.

Coin Edition’s response cited Bitcoin’s limited circulation and decentralization as advantages over fiat currencies, which are printed and managed by central banks. They also argued that increasing fiat currency volatility is to the advantage of Bitcoin’s ultimate value proposition as “sound money” beyond central banks’ control.

Schiff’s contention that gold will fare better in weak dollar cycles is backed by historical precedent. Schiff has not provided a detailed analysis of other assets he expects to be favorably impacted by dollar weakness, other than precious metals. The controversy highlights underlying differences in asset correlations during times of currency stress.

Traditional economists such as Schiff look to historical examples of gold’s behavior under dollar weakness, while cryptocurrency proponents reference Bitcoin’s monetary characteristics. The decline in the Dollar Index presents an opportunity for both gold and Bitcoin proponents to observe real-world behavior under currency weakness.

Related: US Dollar’s Worst Year Since 1973 Becomes the Catalyst for Bitcoin’s Rise