Key Points
- Peter Schiff criticizes the idea of using Bitcoin to offset the US National Debt.
- Schiff also disputes the strategy of holding Bitcoin long-term as a way to avoid inflation.
Peter Schiff, a known critic of Bitcoin, recently voiced his disagreement with the proposition of using Bitcoin as a means to counterbalance the United States National Debt.
A number of Bitcoin enthusiasts have suggested that the US government should purchase Bitcoin now, hold it (HODL), and sell it after two decades to repay the country’s National Debt. They argue that this approach would not result in inflation.
Bitcoin Critic Questions Strategy
The argument is based on the assumption that the price of Bitcoin will significantly increase to millions of dollars per coin. This speculation is also fueled by the belief that the US Federal Reserve will soon resort to money printing, which would further inflate the US National Debt. Schiff, however, considers this logic to be fundamentally flawed and misguided.
Schiff argues that the idea of Bitcoin’s price reaching such high levels due to inflation, and the US government using Bitcoin to settle debt without inflating the US dollar, is inherently contradictory.
Schiff also questions the “never sell your Bitcoin” investment philosophy, asking, “If that’s true and no one who buys Bitcoin ever sells any, what’s the point of owning it?” He believes that this strategy would ultimately lead to investors living in poverty while accumulating Bitcoin, defeating the purpose of investing in the cryptocurrency.
Disagreement with Bitcoin Projections
At the recent 2024 Bitcoin Conference in Nashville, Tennessee, several prominent figures expressed their positive sentiment towards Bitcoin, which Schiff did not hesitate to challenge. Wyoming Senator Cynthia Lummis proposed using $70 billion from the US reserve to purchase 1 million Bitcoin, equivalent to 5% of the total supply.
Senator Lummis justified her proposal by citing the historic Louisiana Purchase, which significantly expanded the size of the US at a cost of 3 cents per acre. Schiff disagreed with her, stating that “borrowing billions to buy Bitcoin adds nothing but debt and inflation.”
Robert F. Kennedy Jr. also suggested directing the Department of Justice and the US Marshals to transfer 200,000 Bitcoin held by the government to the US Treasury. The Treasury would then hold this large amount as a strategic asset. Kennedy also recommended a daily purchase of 550 Bitcoin until the United States accumulates a reserve of at least “4 million” Bitcoin.
Schiff criticized Kennedy’s proposal as a “vote-buying” strategy, accusing him of attempting to appeal to the emotions of Bitcoin enthusiasts.
