CZ of Binance Claims Gold Is ‘Not a Limited Supply Asset’ Thus It Can’t Defeat Bitcoin

Summary

• CZ Challenges Gold’s Finite Nature: Binance founder Changpeng Zhao argued that gold isn’t truly limited in supply, unlike Bitcoin’s fixed cap, suggesting this makes Bitcoin a superior store of value.

• Contrasting Market Movements: While gold prices retreated from record highs due to easing US-China trade tensions and strong US economic data, Bitcoin demonstrated resilience, rebounding significantly from its recent lows.

• Decoupling Correlation: The historical relationship where Bitcoin and gold moved together has weakened significantly, with recent data showing a negative correlation, fueling debate on whether Bitcoin acts more like “digital gold” or a tech-related asset.

Changpeng Zhao, the prominent founder of Binance, widely known as CZ, recently offered a stark perspective on the age-old debate between gold and Bitcoin.

Via a concise post on the social media platform X this Saturday, CZ contended that gold falls short as a store of value compared to Bitcoin precisely because it lacks a finite limit.

“Not against gold, but it’s not a limited supply asset,” he stated, a declaration that quickly fueled discussions between cryptocurrency advocates and traditional precious metals investors.

The Scarcity Argument: Bitcoin vs. Gold

For CZ, the crux of Bitcoin’s superiority lies in its predetermined, capped supply, a characteristic gold does not share.

This assertion arrived as gold’s recent impressive price surge appeared to lose steam.

Factors Weighing on the Precious Metal

The pressure on gold stemmed partly from moderated rhetoric in the US-China trade dispute.

Indications from China’s commerce ministry suggested a willingness from both sides to engage in discussions aimed at resolving tariff issues.

Such easing tensions tend to dampen enthusiasm for safe-haven assets like gold, as the market fear that previously propelled its price begins to subside.

Daniel Pavilonis, a senior market strategist with RJO Futures, interpreted the price action, remarking, “Gold looks like $3,500 may be a top for a little while.”

He elaborated that the emergence of trade resolutions typically curtails panic buying and enhances risk appetite, leading to a cooling effect on gold, a trend currently observed.

Furthermore, economic data contributed to gold’s sluggishness.

A surprisingly strong US jobs report, showing the creation of 177,000 nonfarm payrolls against estimates of 130,000, tempered expectations that the Federal Reserve would implement an interest rate cut in June.

The resulting uptick in the 10-year Treasury yield made non-yielding assets like gold relatively less appealing.

Bitcoin Exhibits Resilience as Gold Falters

While gold experienced a downturn, Bitcoin showed signs of life.

Despite potentially modest year-to-date gains (the original article notes complex figures comparing YTD performance vs recent bounce), its performance has contrasted favorably with the S&P 500’s decline of over 6% this year.

Notably, after hitting a low on April 8th, Bitcoin mounted a substantial rebound of around 20%.

While this recovery didn’t eclipse gold’s peak surge of 26% earlier in the year, it marked a significant turnaround, watched closely by those analyzing the dynamic between traditional and digital assets.

Schiff Counters: Bitcoin Still Tied to Tech, Not a True Haven

Long-time Bitcoin skeptic Peter Schiff countered this narrative.

On X, he argued, “It should be clear from recent price action that claims that Bitcoin has decoupled from the NASDAQ and now trades more like gold are false.”

He advised investors seeking refuge from inflation to stick with gold, suggesting that those wanting NASDAQ exposure should simply purchase tech stocks.

Schiff anticipates market pressure from falling Treasury values and a weaker dollar, conditions he believes favor gold.

Decoupling Dynamics: The Shifting Correlation

Data reveals a significant shift in the relationship between Bitcoin and gold.

After typically moving in tandem between 2020 and early 2024, their correlation broke down sharply around the end of March this year.

A CNBC report highlighted that the 25-week rolling correlation dipped to -0.42, its lowest point since early 2020.

Although a slight recovery in April brought the figure to -0.28, it still indicates a weak, slightly inverse relationship, far from their previous synchronicity.

A -0.42 correlation implies that, during that measured period, a 1% rise in gold often corresponded to a 0.42% fall in Bitcoin.

Defining Bitcoin: Tech Play or Digital Gold?

This evolving dynamic underscores that, despite moments of concurrent gains, Bitcoin and gold are not currently moving in unison.

Geoff Kendrick, leading digital assets research at Standard Chartered, offered a nuanced perspective in a March analysis.

He suggested that Bitcoin operates less like digital gold and more like a tech asset.

Kendrick posited that “Investors might benefit from viewing Bitcoin as both an additional big tech stock and as a hedge against traditional finance,” acknowledging its potentially dual role within investment strategies.

Also Read: Binance CEO Suggests Trump’s Tariff Policy May Boost Cryptocurrency Interest

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