A bitcoin symbol is presented on an LED screen during the closing ceremony of a congress for cryptocurrency investors in Santa Maria Mizata, El Salvador, Nov. 20, 2021. El Salvador's President Nayib Bukele announced during the rock concert-like atmosphere that his government will build an oceanside "Bitcoin City" at the base of a volcano. (AP Photo/Salvador Melendez)
Gold investor and crypto critic Peter Schiff said Bitcoin is just a craze that will eventually come to an end like a pyramid scheme.
Bitcoin has fallen some 30 percent since its $67,000+ peak in November 2021 in a selloff after news broke about the omicron coronavirus variant. The largest cryptocurrency by market value is still up 65 percent year to date, trading at $49,214, according to Coingecko data.
Debate on whether Bitcoin can act as an hedge against inflation has gained traction in recent years after its value skyrocketed as large and institutional investors bought into its allure.
“[Bitcoin] is not even close to a new gold,” Schiff said during a debate on Fox News on whether crypto is a scam or the future. “It’s just a craze and all crazes come to an end. Bitcoin doesn’t have any value by itself. It’s not backed up by anything that has any value.”
Schiff compared investing in Bitcoin to a pyramid scheme, with people who invested earlier making their money from those who invested later. The later investors would “lose a lot of money,” he said.
In the same show, entrepreneur and financial adviser Patrick Bet-David disagreed with Schiff, suggesting that investors in cryptocurrency are much younger and more risk accommodating than those who invest in stocks and gold.
“Somebody that only sold gold or equities don’t like these young guys coming out and saying, ‘Hey we gonna sell Bitcoin,’” Bet-David said.
Schiff responded, “Selling crypto, you are selling hype, you’re selling fantasy and greed all rolled into one.” Schiff has previously referred to Bitcoin as “fool’s gold” and said anyone investing in it is a fool.
Schiff founded his company, SchiffGold, in 2010 to deal gold for his brokerage clients. Known for being bearish on the U.S. economy and the dollar, he advises long-term investment in gold as an inflation-proof store of value.
A stockbroker, financial commentator and radio personality, Schiff hosts the Peter Schiff Show podcast. He’s the former host of the podcast Wall Street Unspun. Schiff ran in the 2010 Republican primary for a U.S. Senate seat in Connecticut, losing to Linda McMahon.
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?
