Gold advocate criticizes Bitcoin’s safe haven claims
Peter Schiff, the economist known for his gold advocacy, made some pointed remarks about Bitcoin in what he called his final comment on the cryptocurrency for the year. He appeared on television recently, talking about what he sees as a “silent collapse” happening in the global economy. His warnings to Bitcoin investors were pretty direct, I think.
He doesn’t buy the “digital gold” narrative at all. To him, Bitcoin is more like a risky asset that actually hides corruption in the financial system rather than solving it. That’s a strong position, but he’s been consistent about it for years.
Performance comparisons and investor psychology
Schiff described Bitcoin’s recent performance as “the slowest horse in the race.” He pointed out that gold and silver have done much better lately. People are turning to Bitcoin expecting huge gains, he said, but they might be missing what’s happening in precious metals.
“People will be disappointed as they miss out on the massive gains in gold and silver mining stocks,” he argued. “The exits from Bitcoin will accelerate when they realize they bet on the wrong horse.”
That’s a pretty stark prediction. He’s essentially saying the current Bitcoin ETF money isn’t permanent. According to Schiff, this money actually came from gold investments and will eventually return there. He thinks Bitcoin ETF holders don’t have the same “HODL” culture that long-term Bitcoin believers talk about.
Structural risks in the Bitcoin market
One of his more interesting warnings was about loans taken out against Bitcoin. Many people have borrowed using their Bitcoin as collateral, he noted, often to avoid paying taxes or because they don’t want to sell and miss potential price increases.
But when prices fall, these borrowers face margin calls. “Lenders will dump their Bitcoins onto the market at the most inopportune time,” he warned. That could create a cascade effect during a downturn.
Schiff also criticized the whole verification aspect of Bitcoin. He called blockchain verification “the verification of nothingness.” Gold-backed tokens at least have a physical equivalent, he argued, while Bitcoin represents ownership of… well, nothing tangible.
“With Bitcoin, you’re verifying ownership of nothing, not something,” he said. “With gold, at least you’re verifying ownership of a physical asset.”
The safe haven debate continues
He’s particularly opposed to Bitcoin being marketed as a safe haven asset. The data shows Bitcoin is positively correlated with risky assets like technology stocks, he pointed out, and negatively correlated with gold.
When the dollar crisis deepens, Schiff believes people will turn to gold—something that’s proven its value for thousands of years—rather than Bitcoin. It’s a fundamental disagreement about what constitutes real value versus speculative value.
His comments come at an interesting time. Bitcoin has had its ups and downs this year, while gold has indeed performed well. Whether Schiff’s predictions prove accurate remains to be seen, but he’s certainly not shy about stating his views.
