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Peter Schiff Criticizes the Use of Bitcoin in US Strategic Reserves

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by Giorgi Kostiuk

2 years ago

Peter Schiff, a long-time Bitcoin critic, has expressed doubts about the idea of using cryptocurrency as part of the US strategic reserves.

Schiff Against Bitcoin Proposal

The discussion started when Tom Lee from Fundstrat said on CNBC that Bitcoin could help solve the US budget deficit. Lee suggested that Bitcoin could serve as a hedge against the deficit, as its price rise could offset related liabilities.

Criticism of the Bitcoin Plan

Schiff highlighted the liquidity risks, emphasizing that any US attempt to sell a significant amount of Bitcoin could lead to a market crash, rendering the reserve ineffective. 'Even if you believe in Bitcoin, such a plan is ridiculous. A large Bitcoin reserve would be worthless, as the government could not sell without crashing the market,' he noted.

Even if you believe in Bitcoin, such a plan is ridiculous. A large Bitcoin reserve would be worthless as the government could not sell without crashing the market.Peter Schiff

Further Comments by Schiff

Schiff also remarked that consumer optimism is based on 'misplaced confidence' in a Trump-inspired economic boom.

In conclusion, Peter Schiff believes that using Bitcoin in US strategic reserves could have negative consequences due to its volatility and limited liquidity.

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