Ever since Bitcoin has reached the center stage of the financial world, investors and bankers have been pulling their hair, trying to make sense of its rise in value and predict its future.
Peter Schiff, the CEO of Euro Pacific Capital Inc. and a former radio personality, believes that Bitcoin and all other cryptocurrencies will drop straight down to a value of $0 and a large proportion of the people investing in them today will lose everything they have.
“People who got it years ago, even people who got it at the beginning of the year have the opportunity to cash out and make a lot of money. But people who are buying it at these prices or higher prices are going to lose practically everything,” he said when speaking to Russia Today.
In other words, he views the whole phenomenon surrounding Bitcoin’s rapid appreciation in value as a sort of pump-and-dump strategy, wherein older investors benefit to the detriment of newer ones.
“These currencies are going to trade to zero or pretty close to it when the bubble pops. Right now, the only reason why people are buying Bitcoin is because the price is going up. When it turns around, they are not going to sell it for the same reason,” he added.
Schiff also said that Bitcoin has “no value” and that it can’t be used as money. It’s a speculative digital asset, and it will implode the moment there’s a sign of minimal trouble, according to him.
He also commented on Bitcoin’s various hard forks, saying that “there is no limit to supply of Bitcoin-branded worthless tokens that can be created.”
“During the information technology bubble, we saw a rally in dot-com company shares. But at least at that time, there were people using Yahoo or Rakuten—people were using their services. But this time, I see quite a lot of people doing cryptocurrency businesses in my circle of friends. But I hardly know anyone in person who is trading cryptocurrencies and I haven’t seen anyone using them in real life,” he said.
At this time, Bitcoin’s price is falling from its previous record of around $20,000, currently trading at $16,964.
We’ll just have to see if this is a case of Schiff’s prediction coming true, or if—as usual—the current drop in Bitcoin’s value is due to a market correction.