How does a ‘worthless’ Bitcoin equate to a Beanie Baby?

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On the heels of yet another vocal forecast about Bitcoin, the businessman well-known for his bold cynicism about cryptocurrencies is trending once again today. Peter Schiff, Chief Economist and Global Strategist at Euro Pacific Capital, recently featured in a RealVision interview to discuss his forecasts for the world’s largest cryptocurrency.

During an interview with Fox News’ Liz Claman a few months earlier, Schiff referred to Bitcoin as “rat poison cubed.”

“Eventually the bubble is going to pop and the price is going to be lower than when Charlie Munger called it to rat poison.”

Similar sentiments were shared by Schiff in a recent interview as well, with the skeptic trying to burst Bitcoin’s bubble with a very unique analogy,

“I don’t think these Bitcoin collections are going to be worth anything when the music stops. People have told me that when the bubble burst in Beanie Babies, they were able to use them to insulate their homes. They could shove them in between the walls, and they made good insulation. You can’t do anything with a Bitcoin. Once nobody wants your Bitcoin, it’s completely worthless.”

Needless to mention, Schiff is incorrect on a number of counts. The evolution of Bitcoin over the last decade, its introduction as a store of value, and the extent of institutional acceptance demonstrate that at least someone needs Bitcoin. It is not a plush toy that will go out of style in the near future.

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Schiff earlier admitted that he was mistaken about the Bitcoin bubble bursting. “I just underestimated how big it would get,” he said in a tweet that ignited a lot of speculation at the time.

 

Another influential point from Schiff revolved mostly around the relation of Bitcoin and fiat currencies – a subject he has previously discussed on a number of occasions. This period was no different from the last, with Schiff remarking,

“Bitcoin is not a currency, it’s not used as a medium of the exchange really, or a unit of account. It’s just used for speculation. It’s not even a commodity, because you can’t use it for anything.”

Schiff is also incorrect in this regard, particularly given that Bitcoin and cryptos are frequently used for a variety of purposes in many nation-states with underperforming fiat currencies. Nigeria, Turkey, and Venezuela are all reminders of this.

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His comments, in fact, are very similar to the ones echoed by Fed Chair Jerome Powell a few weeks back. At the time, Powell had said that cryptos were mainly being used as “vehicles of speculation.”

Understandably, the crypto-latest skeptic’s remarks were met with mockery and derision by the wider audience, with Spencer Schiff even joining in the mockery and derision. MicroStrategy’s Michael Saylor was swift to respond as well, tweeting,

 

Spencer Schiff has previously criticised Peter Schiff’s “understanding of sound money.” In a tweet posted at the end of last year, he noted,

“Your understanding of money is flawed. You think the key determinant of a money’s soundness is possession of “intrinsic value”, a nonsensical concept. What differentiates sound money from fiat money is the former’s emergence on the free market rather than by coercive State edicts.”

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