Economist And Crypto Critic Reveals How Bitcoin Could ‘Destroy’ The Dollar

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As a seasoned economist with over three decades of experience, I have witnessed numerous financial phenomena unfold before my eyes. The rise and fall of currencies, the boom and bust of markets, and the ebb and flow of government policies have all been part of my professional journey. In light of recent developments, I find myself deeply concerned about the potential impact of Bitcoin on the US dollar if the American government decides to intervene in the cryptocurrency market.

A financial expert cautioned that there’s a possibility that Bitcoin might erode the strength of the U.S. dollar, particularly if the authorities decide to interfere with the cryptocurrency market.

Economic expert Peter Schiff proposes that if the U.S. government were to embrace the initial cryptocurrency, it could potentially lead to a bloated money supply and harm the value of the dollar.

Unforeseen Consequences

Schiff, a well-known Bitcoin skeptic, predicts unexpected impacts on the U.S. dollar’s worth when the American government persists with its strategy of meddling in Bitcoin market operations. This could potentially cause an economically unstable bubble.

A financial analyst contends that much of Bitcoin’s price increase is due to government influence, warning that this could potentially cause harmful effects over time and ultimately bring about the downfall of worldwide currencies.

In a recent post, Schiff contends that the widespread adoption of cryptocurrency by the U.S. government could potentially undermine the strength of the U.S. dollar.

In an ironic twist, it’s possible that #Bitcoin could ultimately undermine the US dollar—not by becoming a replacement for it as a global reserve currency, but rather by the U.S. government adopting Bitcoin, printing vast amounts of dollars to purchase it, and inflating a larger bubble that drains the nation’s wealth.

— Peter Schiff (@PeterSchiff) December 5, 2024

Interestingly, it’s possible that #Bitcoin could ultimately bring about the downfall of the U.S. dollar – not by becoming a global replacement for it as a reserve currency, but because the U.S. government adopts Bitcoin, prints vast amounts of dollars to purchase it, and inflates an even larger bubble that depletes the nation’s resources,” Schiff pointed out.

In his view, widespread use of cryptocurrency by the U.S. government could involve purchasing Bitcoin using freshly minted money, a move that might increase the overall money supply and potentially lead to an economic bubble on a massive scale.

He added that such crypto intervention could also diminish the confidence of investors in the US currency.

Political Lobbying

Schiff contends that Bitcoin’s rapid expansion surpassing $100,000 was not primarily fueled by organic market demand, but rather due to political advocacy and government backing.

It’s ironic that #Bitcoin reached $100k primarily due to influencing politicians and aligning with government, rather than relying on free market forces. The achievement of this milestone might not have been possible without the intervention of the government. Essentially, what seemed impossible in a free market was made attainable through the collective power of the state.

— Peter Schiff (@PeterSchiff) December 5, 2024

“It’s ironic that #Bitcoin only hit $100k by buying off politicians and getting in bed with the government,” Schiff said.

From an economic standpoint, I express concern about the government’s support for the alpha cryptocurrency potentially setting the stage for an economic bubble in our country.

He said that Bitcoin might not have reached $100,000 per coin without the government’s influence.

“Without expected government intervention, this milestone never would have been hit. What couldn’t be done in a free market was achieved through the cohesive power of the state,” he explained.

Criticizing The Proposed Bitcoin Reserve

Schiff criticized the idea of creating a national Bitcoin reserve, stating that purchasing substantial quantities of Bitcoin could potentially weaken the U.S. dollar.

The incoming U.S. President, Donald Trump, has suggested establishing a Bitcoin reserve, an idea that would necessitate the American government purchasing substantial quantities of cryptocurrency annually, according to Schiff. This expert forecasts that the U.S. could potentially amass up to 1 million Bitcoins over time.

The financial expert suggested that due to its Bitcoin acquisitions, the United States could potentially find itself needing to liquidate some of its gold holdings as a means to fund these purchases and bolster its Bitcoin reserves.

He warned that it could lead to a financial crisis because it might give an impression that BTC is more viable than the US dollar, adding that it will diminish the global dominance of the US dollar because investors will lose their confidence in the currency.

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2024-12-07 17:12