Financial commentator Peter Schiff made fatalist predictions about the world’s first and foremost cryptocurrency, hinting that Bitcoin price will drop below $1,000 in the near future. Not only was the market completely unfazed by his statements, but it actually marked one of its largest increases in recent months.
Speaking on episode #1145 of the “Joe Rogan Experience” July 17th, financial commentator Peter Schiff took a few punches at Bitcoin, addressing its scarcity, utility, and overall value.
‘They’re Not Scarce’
Schiff took a blow at Bitcoin’s scarcity, denying it entirely, stating:
They think ‘oh, there’s twenty-one million Bitcoins’, and they think that that means they’re scarce. Well they’re not scarce, there’s so many other currencies out there, and it’s only scarce because… it’s coded to be scarce. Gold is scarce because it really is scarce.
Questionably, though, Schiff ties the matter of scarcity with the fact that there are alternatives. This raises more than just a single eyebrow, as the same could be said about gold itself – it’s far from being the only precious metal.
Bitcoin is, indeed, scarce, because there is a predetermined amount that could be ever mined. Just like gold is bound to disappear, at a certain point in time, so is Bitcoin. The only difference is that we actually know how many bitcoins there are.
The fact that there are alternatives to it has absolutely nothing to do with its scarcity, and that’s more than obvious.
Complete Lack of Real Value
According to Schiff, Bitcoin has absolutely no intrinsic value. He says:
There’s nothing that any other cryptocurrency can’t do that Bitcoin is doing… it doesn’t have any actual value. There’s lots of things I can do with gold that shows it has value…
All you can do with it is give it to somebody else. That’s its whole purpose is to give it to somebody else.
As a matter of fact, there are plenty of things that you can buy with Bitcoin, as well as with other cryptocurrencies, which widely validates the fact that they are accepted as a medium of exchange. It would be foolish to compare their adoption to that of gold and fiat currencies, of course, but it’s also worth pointing out that they are in a fairly nascent stage of their development. After all, Bitcoin was only introduced back in 2009.
And for the short decade that it has been around, it has managed to prove its merit more than once. Perhaps there is no greater validator than the fact that the US IRS itself has displayed interest into accepting Bitcoin as a means for payment of taxes. It was proposed in the U.S. state of Georgia and already implemented in Seminole County, Florida, where you can easily use Bitcoin to pay your taxes.
Lack of Stability
As if all of the above wasn’t enough, Schiff went on to add:
I don’t think any of these currencies can ever be stable because there’s no value to stable them. There’s no value to store. The only cryptocurrencies that would work are cryptocurrencies that are backed by a real commodity, like gold.
An immediate question arises upon reading a statement of the kind: why is the U.S. dollar stable when it’s not backed by a commodity? Ever since the US left the Gold Standard, its national currency is backed only by the state of the country’s economy, which is by no means “a real commodity.”
It’s undeniably true that Schiff has a point to a certain extent – cryptocurrencies are not being used as currencies for the most part at the moment. However, this is obviously set to change and denying their value so easily is questionable at the very least. The fact that major payment solutions providers like MasterCard are actively filing and winning patents related to cryptocurrency payments suggests that infrastructure for mass adoption is already being laid down.
Funnily enough, though, the world’s largest cryptocurrency marked an unprecedented increase, spiking by more than 10 percent July 17th when the Bitcoin price gained upwards of $700 in less than 45 minutes.
Do you think Peter Schiff is right to deny any real value of Bitcoin? Don’t hesitate to let us know in the comments below!
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