Peter Schiff is a long-term skeptic of Bitcoin (invest in BTC) that does not seem destined to change his mind. In short, Schiff believes the cryptocurrency industry is a big bubble that could burst at any moment. He thinks that Bitcoin has no intrinsic value and cannot be used for anything.
Schiff is the chief economist and global strategist of Euro Pacific Capital. The well-known stock broker is famous for predicting the 2008 financial crisis. He has built a reputation as a financial commentator and radio personality, and is the author of several books on money matters.
Let's take a look at Schiff's two biggest objections to Bitcoin.
1. It is a 'digital pyramid scheme'
In February, Schiff tweeted: "#Bitcoin is just a digital pyramid scheme." This isn't the first time she has expressed this sentiment, and it probably won't be the last. She called it: “A blockchain letter that will soon run out of chain, leaving millions of delusional speculators to HODL the stock exchange. It can only go on until the supply of bigger fools runs out, or the fools who already own it run out of money to buy more! "
Schiff's reference to the "greatest madman" alludes to the theory of the greatest investment madman - the idea that prices only go up because someone else is willing to pay more for that good. The thinking is that Bitcoin has no intrinsic value, the only thing you can do with it is to sell it to someone else. If there is a point where nobody wants to buy Bitcoin, the whole industry will collapse.
2. It generates no income - in fact, it does nothing
Schiff's other main concern about Bitcoin is that it lacks utility. He told RealVision last year: “It's not an investment asset like real estate, it doesn't pay rent, it isn't a stock, it doesn't pay dividends, it isn't a bond, it doesn't pay interest. It is not even a commodity, because it cannot be used at all ”.
Schiff has argued on previous occasions that Bitcoin does nothing. Where gold can be used to make jewelry and oil can generate energy, he says Bitcoin is useless. Bitcoin fans disagree. They argue that Bitcoin can transform the way we use money. For them, Bitcoin is a commodity with multiple uses in the real world. For example, it can act as a store of value, like a type of digital gold. It can also offer a way to move money easily and cheaply across borders and settle transactions much faster than traditional banking.
On a similar note, what gives value to the US dollar is not that the paper it is printed on can be used for something. The US dollar has value because it is used and people believe it has value. Bitcoin is similar, although the idea of value is more complicated because it is decentralized and does not have the backing of a central bank or government. But Bitcoin enthusiasts argue that certain characteristics, such as trust, scarcity, and security, give it value.