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The Bitcoin price will collapse; a massive liquidation wave is looming, and in the worst-case scenario, Bitcoin could fall to $10,000. These are the warning words of Peter Schiff, one of the most prominent gold advocates, who recently met with Jack Mallors for a major debate on Bitcoin vs. Gold. Here are some very compelling scenes and truly worst-case scenarios from Peter Schiff that sound dramatic.
Let's take a look at the whole thing. I've selected the best parts because they contain very relevant scenes. He says that the Bitcoin price can only continue to rise if there are new fools, and also speaks of the "creative game." So, here's the theory of the biggest fool. The idea behind it is that every buyer, or rather, bets on the asset, will later resell it for more money in an even bigger fool—a kind of pyramid scheme.
And only if there are new buyers can the Bitcoin price continue to rise. Yes, to a certain extent, that's true, but it's the same with gold, other commodities, and so on, and especially with Bitcoin. Even if we didn't have any new buyers, if the current demand were simply... Since Bitcoin remains constant, we have the four-year halving cycles, where every four years the block is halved, meaning only half as much Bitcoin is distributed.
This means that even if demand simply remains constant, the Bitcoin price must rise because the supply is guaranteed to halve every four years. So Peter Schiff is definitely wrong. Unfortunately, many people still think that the new buyers are essentially the exit liquidity for those who bought Bitcoin very early on.
But Peter Schiff forgets that many people never want to sell their Bitcoin, and most people who have truly studied Bitcoin don't even want to exchange it back into fiat currency. They want to stay within the Bitcoin ecosystem. But he simply sees it as a pump in Dumcham, which is a really poor comparison.
It's quite obvious that Peter Schiff is a Bitcoin critic, but this argument shows just how weak the arguments of Bitcoin critics often are. He says that most people have lost money with Bitcoin, and that many people bought at the peak and then lost money, and that this supposedly represents the majority of the Bitcoin network.
A relevant part of the population lost money here, but if we really look at the current situation, we've actually lost money with Bitcoin. The people who bought at €10, at € 1,000, at €10,000, at €20, €30, €40,000, at €50,000, they all made gains. Nobody lost money there. Only the people who bought at €60, € 65, €70,000, and so on, lost money, and that's maybe 10% of the Bitcoin network.
I don't know exactly, but it's not a large majority. That means only a very small percentage of the Bitcoin network is currently in the red. Most people are actually in profit right now. And here, Peter Schiff is simply confusing facts and arguing against Bitcoin, even though his argument is n't supported by any data or facts at all.
And I think there is a big crash coming, especially when we get a lot of liquidations out of the ETFs. I think that's still coming. Uh, there, I don't think the people in the ETFs are dead. Holders, uh, you know, they're traders, uh, you know, and they're going to take their losses and move on. And I think there's going to be a massive crash in Bitcoin when that happens.
Whether that's the ultimate bottom, I don't know. Maybe there will be a bounce, uh, but I think Bitcoin is going to go below 20,000, maybe even below 10,000, when you get this big liquidation and own bitble AR 2010. Ahad, that does what people thought in 2020. He was before that the ETF holders, for example, the clients of BlackRock, that they are only traders and don't intend to hold Bitcoin long-term.
And yes, it's quite possible. Ultimately, nobody can know whether they are traders or long-term holders, but there is a lot to suggest that the ETF holders definitely have a longer time horizon in mind. Because if you are, for example, an institution and really have to enforce regulations to even be able to invest in Bitcoin, then judges have to decide, then companies have to establish headquarters.
And so on, they have to meet, and then, if they have sufficient majorities, they can decide to allocate certain positions in Bitcoin. If you go through the whole office process here, you're not just buying Bitcoin and then selling it again three weeks later. So, in my estimation, many institutional investors—and there are simply many who buy Bitcoin ETFs here— aren't retailers but often institutional investors who have a time horizon of at least three years.
Therefore, it's really questionable whether Peter Schiff is right in his argument. But of course, it's quite possible that trading is taking place here, and the thing is, if money can flow in quickly, it can also flow out quickly. So there's a certain risk here. But he goes much further; he assumes that in the worst- case scenario, Bitcoin could crash to $20,000 and then even below $10,000 because we could see waves of liquidation.
That means first, the Bitcoin ETFs will be sold off, then there will be uncertainty in the market, and then there will be another Bitcoin sell-off, which in the worst-case scenario could lead to... He says Bitcoin prices would reach $11,000, and he also goes on to say that Bitcoin is essentially worthless, that it can't be used industrially, unlike gold, where you can put gold into iPhones or something.
Therefore, Bitcoin would be worthless; it has no intrinsic value. He also sees other problems, such as the fact that nobody uses it as a payment medium. In comparison, he always talks about gold, and gold could be used as a payment method via a gold-backed cryptocurrency. He sees the big advantage of gold in this.
And I don't want to badmouth gold at all; I actually think Peter Schiff is pretty cool with everything he says about the fiat system. It's just his take on Bitcoin that I find very critical, as well as his take on a gold-backed cryptocurrency. Many people think, "Okay, you can just take gold, put it on a blockchain, and then you've solved the problem and can easily pay with it." But they forget that this always creates a trust problem because we need a...
To have a gold-backed cryptocurrency and somehow represent gold on the blockchain, we always need a third party, a trusted party, to verify whether the gold on the blockchain is actually available in the real world. So we always need an interface between the real world and the digital world, and Bitcoin has fixed precisely this oracle problem, this trust problem.
We don't need a central authority to verify whether the Bitcoins actually exist because everyone can do that themselves with their own Bitcoin note. Now, in the next part, it gets really interesting because now we're discussing whether it could make sense for the US to establish a strategic Bitcoin reserve.
Now listen very carefully: ysit BA bitin bit out BU Bit. And this is what I have to say, yes, I can understand how he argues here because he says, yes, of course, the US wants to introduce a strategic Bitcoin reserve. Synti Lumes made the legislative proposal, and that would also mean that people would continue to buy Bitcoin.
And clearly, many Bitcoin holders simply want their backing pumped so that the Bitcoin price goes up. And if the US buys a million Bitcoins, then... It will definitely be very, very positive for the Bitcoin price, and accordingly, Peter Schiff argues that people aren't thinking about whether this makes sense or not; they 're simply blinded by their gear because they just want the Bitcoin price to keep pumping.
To a certain extent, I have to agree with his approach. Then he talks about the possibility of a kind of stat bailout. So, if there are no more new depositors or new users for Bitcoin, then a key player has to step in and push the Bitcoin price. Otherwise, the "creation of fools" game wo n't continue if you always need new players to enter the game.
And if there are no new people on the market, then the government has to step in and bail them out. It's a very crazy theory he has. Jack Mers makes a very good point, though, and he addresses what would happen if Peter Schiff does n't understand IRT and perhaps Bitcoin at all, because he assumes nobody needs Bitcoin and nobody needs...
A strategic Bitcoin reserve, but the core idea here is that Bitcoin is limited, and you simply can't just decide in 100 years, " Yeah, I'll just create new Bitcoins now," because 99.9-something percent of all Bitcoins will already have been distributed, and then it becomes very difficult to get fresh Bitcoins unless you have an extremely large amount of money, because the Bitcoin price will have risen massively by then.
Therefore, the idea of a strategic Bitcoin reserve is to create it as early as possible; the earlier, the better, because now you can still buy Bitcoin at relatively low prices. The later you get involved, the more countries will create strategic Bitcoin reserves, the higher the Bitcoin price will rise, and the worse the odds will be for you as a nation.
Ultimately, it's like a Bitcoin race at the nation- state level, and the first one to do so will be the biggest beneficiary. If the USA is the first mover, they will profit massively, ahead of China, Russia, and so on. But Peter Schiff doesn't seem to understand this. If you want more gold, you can always buy it in 100 years.
Digging for gold, or even searching for gold with technological advancements, is fine by me. If you want more fiat money, you can simply print it out of a printer anytime. But if you want more Bitcoin, you ca n't just easily create it. There are very clear rules. Every four years, the block payout halves, and if we just consider the timeframe, by 2034 alone, 99% of all Bitcoin will already be available.
Accordingly, Peter Schiff probably has some comprehension problems because he doesn't understand how scarce Bitcoin really is. I found this debate very interesting, especially since it always shows that critics often have very strange arguments or perhaps haven't sufficiently studied Bitcoin. I found some of Peter Schiff's arguments to be neither objective nor factually correct.
However, I still find it interesting to look at such voices when they can be used to explain Bitcoin very well and then refute these arguments. If you want to buy Bitcoin, feel free to check out 201Bitcoin. It's the easiest way to buy Bitcoin in Europe, and with the code Bitcoin Hotel, you can get up to...
20% discount when buying Bitcoin. Let me know in the comments below if you're as Berlin-based as Peter Schiff or if you see things differently. Until then, peace out.
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