Economist Peter Schiff criticizes former U.S. President Donald Trump’s proposed strategic Bitcoin reserve plan if he were to be re-elected. While the proposal has been welcomed by many industry leaders and some lawmakers, Schiff warns that this move could have negative effects on the U.S. economy.
Dangerous Bitcoin Reserve Cycle
Schiff expressed concerns about promoting BTC as a primary investment tool. He suggested that if the U.S. government were to establish a Bitcoin reserve and purchase 1 million BTC, it could potentially acquire even more. He argued that this initial purchase would drive Bitcoin prices to new highs, leading to significant gains for early investors.
Following this price surge, Schiff proposed that investors might sell their BTC for profits, potentially leading to a rapid depletion of the government’s BTC assets. Moreover, he pointed out that the government might resort to printing more dollars to stabilize prices, which he considered unsustainable.
Political and International Developments
Plans for Bitcoin reserves in Congress gained support with Senator Cynthia Lummis introducing a related bill. President Trump, if re-elected, reaffirmed his intentions regarding Bitcoin, generating optimism in the sector. Countries like Bhutan have increased their Bitcoin reserves, surpassing $1 billion.
While some industry leaders endorse the BTC reserve plan, Schiff remains a staunch advocate for gold. He stressed that gold holds a more stable position as a precious metal and has stood the test of time.
Currently, Bitcoin’s price has surged to $87,300, reaching a new all-time high with a 10% increase within 24 hours. The Bitcoin reserve proposals continue to spark discussions in economic and political circles, showcasing differing opinions and strategies.
