Bitcoin News Today: Bitcoin's Tech-Stock Crash Exposes "Digital Gold" Flaws: Schiff

Bitcoin's recent collapse on October 10, 2025, has reignited debates over its role as "digital gold," with economist Peter Schiff delivering a scathing critique of the cryptocurrency's safe-haven credentials. The crash, which saw Bitcoin plummet over $10,000 in minutes amid escalating U.S.-China trade tensions, starkly contrasted with gold's resilience as it hit a record $4,000 per ounce October 10 Tragedy, The Day Bitcoin’s “Digital Gold” Myth Went Up in Smoke^[1]. Schiff, a long-time gold advocate, argued that the event exposed Bitcoin's financialized nature, likening its behavior to high-beta tech stocks rather than traditional safe-haven assets October 10 Tragedy, The Day Bitcoin’s “Digital Gold” Myth Went Up in Smoke^[1].

The market turmoil, dubbed "Crypto Black Friday," erased $19 billion in leveraged positions within 24 hours, with Bitcoin dropping 11% to $107,485 and Ethereum falling over 15% What the Crypto Black Friday Revealed About Gold’s Strength^[4]. Meanwhile, gold absorbed the shock, reinforcing its status as a reliable store of value. Schiff emphasized that Bitcoin's correlation with equities-reaching 0.87 in 2024-undermines its "digital gold" narrative, as it behaves more like a risk-on asset during market stress Is Bitcoin Still 'Digital Gold'? The October Crash Tells A Different Story^[5].

The divergence in asset behavior was amplified by macroeconomic factors. Gold, with its 53% year-to-date gain, attracted inflows during geopolitical volatility, while Bitcoin's 20% underperformance against gold since August highlighted its fragility Peter Schiff Predicts Bitcoin Crash as Gold Soars Beyond $4,000^[3]. Institutional adoption, including ETFs and corporate treasury purchases, further entrenched Bitcoin's ties to broader market sentiment. As of October 2025, over 40% of Bitcoin supply is held institutionally, linking its fate to equity and bond market dynamics Is Bitcoin Still 'Digital Gold'? The October Crash Tells A Different Story^[5].

Schiff's warnings were echoed by analysts like Nic Puckrin of The Coin Bureau, who noted that Bitcoin's volatility and leverage risks make it unsuitable as a true diversifier. "Gold and risk assets, including Bitcoin, are up this evening. But while Bitcoin is just recovering part of Friday's loss, gold is trading above $4,050, close to a new record high," Schiff observed What the Crypto Black Friday Revealed About Gold’s Strength^[4]. The economist also projected gold could reach $100,000 per ounce, citing the U.S. dollar's declining purchasing power Peter Schiff Predicts Bitcoin Crash as Gold Soars Beyond $4,000^[3].

Market participants remain divided. While some, like Bitcoin proponent Brian Shuster, argue the cryptocurrency's smaller market cap offers greater upside potential, others, including BlackRock, recommend allocating only 1-2% of portfolios to Bitcoin due to its volatility Is Bitcoin Still 'Digital Gold'? The October Crash Tells A Different Story^[5]. The debate underscores a key distinction: gold's near-zero correlation with equities and negative dollar correlation make it a proven hedge, whereas Bitcoin's evolving role as a tech-like asset challenges its safe-haven status Given Trump’s Pro-Crypto Stance, Is It Time to Fully Ditch Gold in Favor of Bitcoin?^[7].

The October 10 crash also revealed structural vulnerabilities in crypto markets. Thin liquidity and excessive leverage exacerbated the selloff, with over 1.6 million traders liquidated in 24 hours What the Crypto Black Friday Revealed About Gold’s Strength^[4]. Unlike gold, which has centuries of institutional trust, Bitcoin's institutionalization through ETFs has altered its risk profile. As André Dragosch of Bitwise noted, gold remains the superior hedge against stock market downturns, while Bitcoin may counterbalance bond market pressures-a nuanced role rather than a direct replacement Given Trump’s Pro-Crypto Stance, Is It Time to Fully Ditch Gold in Favor of Bitcoin?^[7].

For investors, the lesson is clear: diversification across both assets may optimize risk-adjusted returns. While gold's performance during the crisis reaffirmed its traditional safe-haven role, Bitcoin's volatility highlights the need for disciplined allocation strategies Is Bitcoin Still 'Digital Gold'? The October Crash Tells A Different Story^[5]. Schiff's analysis, rooted in Bitcoin's financialization and lack of counterparty-free properties, positions gold as the enduring store of value in times of geopolitical and economic uncertainty October 10 Tragedy, The Day Bitcoin’s “Digital Gold” Myth Went Up in Smoke^[1].