Peter Schiff: “The value of bitcoin depends only on the trust of people”

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The president of the brokerage company Euro Pacific Capital believes that investments in digital assets and fiat currencies cannot be called a salvation from inflation.

Cryptocurrency skeptic Peter Schiff, in a discussion with Australian economist Steve Keen, tried to assess the tools that investors are trying to use to hedge the risk of rising inflation.

Many Bitcoin proponents, including renowned writer Robert Kiyosaki, consider Bitcoin to be the most suitable asset to save money. However, Schiff has a completely opposite point of view. He is convinced that this is just a myth:

“Fiat currencies have no real value, just like cryptocurrencies. Since they have the same weakness, they are supported only by the trust of people. Therefore, people trying to save their savings during a crisis with investments in bitcoin are acting foolishly.”

There are always people speculating on cryptocurrencies, using them as an alternative to regular money. But these people are just “thrown out of the fire and into the frying pan,” Schiff added. He does not rule out that someday bitcoin may jump its all-time high of $69,000 and reach a new all-time high. Ultimately, though, bitcoin and other cryptocurrencies are a bubble, Schiff concluded:

“I’m not smart enough to know how big this bubble will get before it bursts. But I have enough brains to see the bubble when it is inflated.

Australian economist Steve Keen has a more optimistic view of cryptocurrencies. He called bitcoin an effective tool for speculation, since bitcoin can be divided into parts and easily sold. At the same time, Keane is concerned that cryptocurrencies based on the Proof-of-Work consensus algorithm can have a bad impact on the environment. According to a study conducted by the Crypto Carbon Ratings Institute, the annual consumption of electricity by the Bitcoin network is 89.78 TWh. Keane suggested that many governments will follow China’s lead and ban cryptocurrency mining due to power consumption issues:

“The world will face an acute energy crisis in the next decade. And if we continue to use fossil fuels, then the easiest way to reduce energy consumption is to ban cryptocurrency mining.”

As a supporter of investing in gold, Peter Schiff previously stated that investing in bitcoin will depreciate in the next ten years. Schiff recently said that the price of bitcoin can rise if the NASDAQ stock index rises and the price of gold falls.

Source: Bits

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