Renowned economist and gold advocate Peter Schiff recently appeared on TV to draw attention to the “quiet collapse” of the global economy and issue a stark warning to Bitcoin investors.
Schiff argued that Bitcoin is not “digital gold” but rather a dangerous asset that masks corruption in the financial system.
Schiff described Bitcoin’s recent performance as “the slowest horse in the race.” He pointed out that while investors are focused on BTC in hopes of making huge profits, gold and silver performed much better. “People will be disappointed to have missed out on the big gains in gold and silver mining stocks. People will realize they were betting on the wrong horse and the exit from Bitcoin will accelerate,” Schiff said.
Schiff argues that the “hot money” associated with the launch of Bitcoin ETFs is not permanent, arguing that this money actually comes from gold and will find its way back to where it came from. Schiff said Bitcoin ETF holders don’t have a “HODL” culture and will sell and move into gold after the first severe shock.
Schiff said one of the biggest risks in the Bitcoin market is the loans made against Bitcoin. “Many people are borrowing with Bitcoin as collateral to avoid paying taxes or miss out on rising prices. When prices fall, these people will have no choice. Lenders will dump their Bitcoin on the market at the most inopportune time,” he warned.
The prominent economist, who described Bitcoin’s verifiability through blockchain as “nihilistic verification,” argued that there is indeed an equivalent for gold-backed tokens. Schiff reiterated that cryptocurrencies lack intrinsic value, saying, “With Bitcoin, you’re validating ownership of nothing, not something. With gold, you’re validating ownership of at least a physical asset.”
Schiff strongly opposes marketing Bitcoin as a safe-haven asset, saying data shows that Bitcoin is positively correlated with risk assets (such as technology stocks) and negatively correlated with gold. According to Schiff, if the dollar crisis deepens, people will turn to gold, which has proven its value over thousands of years, rather than Bitcoin.
*This is not investment advice.
