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Bitcoin, the flagship cryptocurrency, is currently on track to secure its biggest gain since April.
At press time, the digital gold is up by nearly 9% against the asset that is viewed as the traditional safe haven, according to Bitfinex data.
On Apr. 22, the BTC/XAUT pair surged by 11% on the exchange, but Bitcoin bulls still have enough time to top these gains.
"Black Tuesday" for gold bugs
Gold has had a massive run this year, substantially outperforming both US equities and Bitcoin.
However, things took a sudden turn for the worse on Tuesday for bulls, with both the prices of gold and silver recording their biggest intraday drops in years, Axios reports.
Some believe that the trade has now become too crowded after a video of people lining up to buy physical gold bars and coins in Sydney, Australia, went live on the X social media network.
Schiff: sell "fool's gold"
Gold bug Peter Schiff, who has been extremely vocal about Bitcoin's underperformance against gold, has already weighed in on the recent sell-off, describing it as "a shakeout." However, he has noted that gold is still trading above the $4,000 level, which is quite remarkable.
At the same time, Schiff is convinced that the recent Bitcoin rally presents yet another opportunity for Bitcoiners to sell what he describes as "fool's gold."
"Bitcoin is catching a bid from this selloff, creating another window for Bitcoiners to sell fool's gold and buy the real thing," Schiff.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team