Peter Schiff Decodes ‘Flawed’ Logic of Bitcoin Going to Millions Per Coin

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As a seasoned researcher with a background in economics and finance, I have closely followed the Bitcoin market and its proponents for several years now. Having witnessed various debates surrounding the digital currency, I cannot help but express my disagreement with Peter Schiff’s recent criticisms of the logic within the Bitcoin community regarding the US National Debt.

As a researcher studying the cryptocurrency market, I’ve noticed that some Bitcoin advocates have been making a case for the price of BTC reaching millions per coin based on their belief that the Federal Reserve will soon resort to money printing, leading to an even larger US national debt. However, in my opinion, this line of reasoning is misguided and flawed.

Peter Schiff Criticizes Bitcoin Logic

Schiff criticized the proposition that the US government could buy Bitcoins now and sell them after 20 years to repay the national debt, avoiding inflation. He also pointed out the inconsistency in this argument: on one hand, believing that Bitcoin’s price would skyrocket due to inflation; on the other hand, assuming the government could use Bitcoin to tackle the debt problem without worsening the currency’s value.

Schiff raised doubts about the investment strategy advocated by President Trump and Michael Saylor, which encourages holding onto Bitcoin indefinitely without selling. On Twitter, he posed a question: “If no one who owns Bitcoin ever sells any, what’s the reason for having it in the first place?”

Peter Schiff expressed concern over the potential paradoxical outcome of this investment method: impoverished living for individuals amassing Bitcoins. He challenged the logic behind such a strategy, arguing that it contradicts the fundamental aim of Bitcoin investment.

As a researcher studying the world of cryptocurrencies, I’ve come across intriguing statements from both Saylor and Trump encouraging people not to sell their Bitcoins. However, if no one ever cashes out their Bitcoin holdings, what’s the purpose behind owning it in the first place?

— Peter Schiff (@PeterSchiff) July 28, 2024

Schiff Slams Sen. Lummis’ Bitcoin Investment Proposal

Last weekend at the Bitcoin conference, Senator Cynthia Lummis from Wyoming proposed using $70 billion from the United States reserve to acquire approximately 1 million Bitcoins, equating to around 5% of the total supply. In explaining her proposal, she drew a comparison to the historic Louisiana Purchase, which expanded the US territory by nearly doubling its size for just 3 cents per acre.

Schiff pointed out that acquiring massive amounts of money to purchase Bitcoin only results in accruing debt and inflation. With the US government already burdened by debt, any extra spending necessitates taking on even more debt.

Senator Lummis’ proposal for using forex reserves to buy Bitcoin is equivalent to borrowing, according to Schiff. He added that these reserves could instead be utilized to decrease the national debt. However, Schiff cautioned against this action as it might lead to a lack of reserves for the US, potentially worsening our financial instability.

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2024-07-29 10:21