Bitcoin is an asset that is fueled almost entirely by â€œfalse hopeâ€� and should demand falter, the price is just going to â€œcollapseâ€�, said Peter Schiff, chief market strategist at Euro Pacific Asset Management.
â€œUltimately, bitcoin is going to collapse, and any demand that it might have siphoned away from gold is going to return to gold. The bitcoin story is one of a bubble, itâ€™s a modern-day Tulip Mania, itâ€™s foolâ€™s gold,â€� Schiff said.
Bitcoin is simply a Ponzi scheme, where the price is supported solely by demand, and when it does falter, the â€œgreater foolâ€� will be left holding onto the losses, Schiff said.
â€œThere are two kinds of people that are in bitcoin: there are the people that donâ€™t know itâ€™s a bubble and donâ€™t know itâ€™s worthless and then there are the people who do know but they donâ€™t care, because the price is going up and they figure theyâ€™re going to get out before the bottom drops out, but I think thatâ€™s a lot harder to do. People think they can get out, but I think most people are going to be trapped,â€� he said.
Importantly, bitcoinâ€™s recent price surge has not been driven predominantly by institutional funds, Schiff said.
â€œI think some institutional money has gone in. Obviously thereâ€™s been a couple of hedge funds that have gotten involved, but as a percentage of all the institutions that are out there, itâ€™s tiny. I think it is being blown out of proportion,â€� he said.
On the economy, Schiff said that Bidenâ€™s recent $1.9 trillion stimulus plan is nothing more than a â€œsedativeâ€� and that inflation is still expected to occur.
â€œI think [prices] would be rising much faster if it wasnâ€™t for the rest of the world bridging the gap between what we produce and what we consume through trade, but I think thatâ€™s coming to an end. The Chinese and our other creditors are no longer buying U.S. Treasuries,â€� he said.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
The post Peter Schiff: Bitcoin still going to â€˜collapseâ€™; â€˜death spiralâ€™ of inflation coming appeared first on TechFans.