Ep. 276: Bitcoin is a Digital Risk Asset, Not a Currency

The Peter Schiff Present Podcast – Episode 276

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Speculative Asset

Bitcoin is a digital danger asset, not a forex. Should you personal bitcoin you might have an asset, but it surely is not a secure haven. A secure haven is an asset that is not more likely to go down compared to one other speculative funding.  Bitcoin has been extraordinarily unstable; it occurs to be going up, however the value is based mostly on hypothesis.  Does anyone consider that bitcoin has much less draw back danger than the inventory market?

Not a Currency

Bitcoin is not used as forex.  They commerce in bitcoins for or euros or yen to purchase issues, however only a few authorized items and providers are priced in bitcoin.  As a result of the worth is extremely unstable and backed by nothing, it cannot be used as a forex. It is getting used as an asset.  The variety of high retailers who settle for Bitpay is diminishing, not rising. Retailers will attempt to make it simple to commerce bitcoin for forex which might then purchase items and providers.  Most individuals who personal bitcoin will not be spending them; they’re hoarding them as a result of they suppose they’ll hold going up.

Simply Noise

On the finish of the day, the realized good points from hypothesis in bitcoin are going to be overshadowed by the speculative losses. All the remainder of it is simply noise.  The realized earnings might be targeting a small group of individuals, whereas the realized losses might be dispersed amongst a bigger inhabitants.

Reversing the Penalties

Bitcoin will find yourself reaching the other of its authentic aim, which was to problem the ability of central authorities, to disrupt cash, that is would rein in authorities and have actual commodity cash in the identical manner FedEx upended the Publish Workplace or Uber upended taxis. This is going to present extra energy to authorities, as a result of when digital currencies collapse, the central bankers will say, “We informed you so! This is what occurs while you enable the free market to do what authorities ought to do.  When the free market creates cash it results in catastrophe.  You must stick to currencies backed by authorities. ”

No Joke

The unique currencies that have been created by the non-public sector, and never by authorities have been issued by banks and backed by gold. In the present day, the non-public sector might concern digital forex backed by gold identical to paper forex backed by gold. What gave the paper forex worth was the gold backing. If any financial institution tried to concern paper forex backed by nothing, it might have been laughed out of existence. It could have been a joke, besides now it is not a joke. Individuals truly need digital forex backed by completely nothing.

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  1. If the power get shut off, bitcoin is useless. Get BOTH Precious metals 20-25% and BITCOIN 10-20%, have food stocked, and use 20-30% net worth to speculate on stocks/assets/other investments, be smart stop being all-ins on hype trains

  2. everything is a bubble in the crypto. bubbles keep getting created and popping. just weeks ago the bubbled popped, and just like last week the bubble created, and it popped again just today. it's an endless cycle of bubble creation and bubble popping

  3. lol he is comparing the reality of digital money versus a digital house and a real house. fiat currency is also created out of thin air, it's also kind of virtual money like bitcoin. so we better just use gold as money because that's the most real tangible currency it can get. problem: gold are easy to rob and loose, and that's why banks and fiat were created to solve this problem

  4. i only read the title and came here to dislike…

  5. you can't buy gold. where are you going to store gold. in your house? u can get robbed. if u buy gold on stock exchange, u don't own that gold unless u hold it in your house

  6. It is not that peter doesn't get it, don't be naive. He has a dog in this fight, he has been losing money. That's why he is all offensive. Anyone who is buying bitcoin instead of gold is a lost customer for him…

    For the average investor; you can both own gold and cryptos, there is nothing against it. In fact diversification is needed with any healthy portfolio.

  7. Attn; Crypto currency enthusiasts : The three stages of a life cycle of a Asset bubble 1. the early adopters /innovators (when bitcoin was $0.07 in 2010) 2. The speculators that copy the success of the early adopters ( 2010-2016) 3. The idiots entering and holding at the end who think it's "different this time" which one is YOU ? Are you an unsophisticated investor with no exit strategy??? I know I'm waisting my time but at least I'll be able to say I warned instead of watching the lambs go to their slaughter.

  8. I agree peter there is no unique value in bitcoin. it does have speculative value like a leger for transferring value tied to actual commodities or money, zero or low fee transfer of such transaction. But the bitcoin tech is not unique. anyone can make their own crypto currency , if you look it up there are hundreds. i think the tech may have a future but that does not mean that Bitcoin the digi currency that will make it.

  9. I took Peters advice and bought some Bitcoin Plus today, good tip, thanks Peter.

  10. Logical and clear, excellent, thanks Peter

  11. Bitcoin for many people represents hope in breaking the current rigged financial system and government power, that's its true value, the power of an idea, that's why it's strong. May be bitcoin or other crypto, doesn't matter. If you want to stand your point Peter you must deconstruct this idea.

  12. I’ve enjoyed listening to Schiff’s principled rejection of Bitcoin for a while. Gotta give him credit for at least remaining consistent. I think his most compelling argument is regarding the infinite supply of different cryptocurrencies. Since it’s just an open-source code base, anyone can fork and create a new coin / chain. However, I think the main counter to this line of thinking is really the network effect. Forking a codebase doesn’t automatically give it value. Sure, perhaps speculators will move the price up but that’s transitory at best. A fork creates value from the competence of the developers who maintain it and the users who trust the former. I think his mistake is thinking that you can create a crypto and then just release it into the wild without any additional maintenance.

    He’s thinking of crypto strictly as money. Yes it’s money, but it’s more than that. It’s really like SaaM (Software as a money). The money, in this case, will only remain valuable as long as the software remains relevant.

  13. This is brilliant Peter Schiff, thanks for the wake up call. Of course the BLOCK CHAIN technology with 'SMART CONTRACTS' is a digital tech 'breakthrough' , but for real MONEY your reasoning appears to be very sound.

  14. Most of the world has NO idea what is a BitCoin, (a toy for computer nerds) I have been to remote parts of Africa and paid for services with GOLD !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  15. Interesting Times we're living… ONLY TIME WILL TELL !!!

  16. bitcoin is not a bubble or scam, it's just not safe because the government could ban it. Why would any government in the world allow bitcoin to exist is just unbelievable. it totally destroys government fiat currency control because you're not relying on the government money anymore. And if you dont rely on government USDs, then monetary policy is dead, fiscal policy is dead, welcome back to the 1800s.

  17. if you dont believe in bitcoin then you should borrow in bitcoins, lets see how far you get cuz Bitcoin went up 300% in 4 months?
    maybe next year its worth 0 so if you borrowed it you wont have to pay it back.

  18. Very disappointing to hear Peter being so sloppy in his "argumentation". Even before talking about cryptos of which Peter hasn t the slightest idea of what it is, the examples given on the dot com bubble are just completely false. Amazon stock is now at $958, considerably more than in 1999, contrary to what Peter claims. Amazon isn t making any money? It hasn t returned a profit, which is very different. And what's with bringing greed all the time? We re talking about investment, not philantropy. I quit listening at 9:00. Useless ranting.

  19. The attribute of gold that has made it money throughout history is that it is the material that is least affected by entropy i.e nothing about gold changes with time.

    Crypto currencies will have this property if the internet becomes ubiquitous, uncontrollable and indestructible.

    Additionally, it is in central banks interest to put currencies onto a blockchain (most likely ripple) as it allows for full audit and control of citizens spending. It would also make the implementation of negative interest rates feasible.
    Ironically, central banks will do this and so create the environment for a true decentralised, anonymous, digital gold to emerge.

    Before that happens crypto currencies will be used to remove the possibility of ownership for everyday people, ensuring all of their production is siphoned into the economy. If they create a cashless, blockchain society; gold and silver transactions will be illegal as this would be the only way to hedge against a deflationary monetary policy that is well overdue after nearly a century of Keynesian economics. This would further create demand for a true decentralised, anonymous, digital gold. They will also have to legalize recreational drugs or further increase demand for a true decentralised, anonymous, digital gold.

    If you buy gold know that after 2020 you may not be able to legally sell it for up to 1-2 decades (it will still hedge during this time). Be aware when the real cryptocurrency emerges gold will be made redundant.

    The above is the most pessimistic outlook. Optimistically it is possible that the true crypto currency already exists and anyone holding gold, silver and crypto after 2020 will have appreciated their wealth through the greatest wealth transfer in human history. Either way gold is the best bet but crypto is no hype bubble.

  20. I prefer The Health Ranger podcast to hear trash about bitcoin, at least Mike Adams is funny…

  21. The entire US or the Entire World does not need to accept or use Bitcoin (Or Cryptos) for them to be successful or valuable.

  22. A few of Peter's arguments has stuck with me and I would like to hear other people's comments.

    1)Peter says that while bitcoin is limited to 21 million coins which should avoid inflation, the problem is that there's no limit to the number of crypto currencies that can be created to compete with bitcoin, so there is no limit to the number of digital coins.

    2) Bitcoin like fiat currency is not backed by anything, and the argument against this criticism is that only 21 million coins can be created (so no chance of abuse) however point 1 above argue against this.

    Don't just reply with insults, I want good arguments why Schiff is wrong here

  23. One week later we're still over $4k. Peter will watch this thingel eventually go to $50k and still call it a bubble. Bottom line is you're witnessing the FREE MARKET in full force. Bitcoin and Ethereum are LITERALLY both priced at the same levels gold and silver should be at. This is what happens when markets are UNMANIPULATED!

  24. What are Peter thoughts on the government confiscating gold like they did in the 30s's I believe? The government cannot confiscate your bitcoin.

  25. Why the fuck is everyone ignoring the incredible technology behind bitcoin and altcoins? The blockchain is taking over!!

  26. I stopped holding bitcoin overnight after listening to your podcast concerning an unlimited number of crypto. I think your spot on. I would rather wake up with lost gains than wake up with massive loses. I wonder how a cashless society would fare with a situation like Texas. What is your bitcoin worth when the power goes out and there's no cell phone sertvice?

  27. Peter I hope you read these comments. You should make a call in show where people who want to argue the merits of crypto currency can, and you can try and refute them.

  28. Bitcoin is a currency, gold is just a metal which there is oversupply. The government is trying to turn bitcoin into an asset, by preventing people from exchanging with each other.

  29. you said Bitcoins were $4200 during this podcast. Its now $4800.

  30. 13:55. Schiff would be the guy against the idea of paper currency.

  31. 24:47 Bitcoin isn't gonna work out. Meanwhile in reality and 9 years later.

  32. I am trying to genuinely understand the concept of digital currency. I can understand how it is a "currency," but it seems that it can only be a fiat currency. I don't see how it is more material than my dollars, I just think it would be harder for someone to disguise how they are manipulating its value, given what I know about it.

  33. Beyond the technology of block-chain and mining verification – What about the inherent value of the illicit market?

  34. youtube(.)com/watch?v=nYQFgoSB468 BLOCKCHAIN get Bitcoin Cash from 01.08.2017 FREE

  35. 96 out of the top 100 cryptos (by total market cap) are down for the last 24hours… think this might be profit taking or the turning point? Peter: What would you look for (what kind of "symptoms") to let you know when the turning point (when they will eventually collapse) will occur?

  36. I have bought some cryptos knowing it is a bubble. Hoping to sell when it's still growing, before it crests and plummets.

  37. Gold does not really have a value, only in the mind of the potential buyer.
    It doesn't have much of a use, other than jewelry or a paper weight.

  38. "you don't have an axe, you don't a pick." lol oh you.

  39. Schiff didnt even mention block chain technology even once. that is one of the reasons that people think crypto currencies will change the world. i dont think he has a clue about that though. he is a like broken record on gold and fiat currencies.

  40. ??? yes, it's a bubble ! Who created the B and why ,for me is a question

  41. SILVER BETTER THAN GOLD, Silver has many more uses than gold, industrial one, even toothbrush is cover with silver particles, silver is more important than gold for real life, GOLD is only more rare

  42. bitcoin could become the biggest scam of all time, but governments and regulators won't allow it to get too out of hand. when it drops 90% overnight, it's going to be fun to watch

  43. Thank you Peter….Your record is close to stellar!!!

  44. Peter I used to be a Gold Bug. but tbh i wish i sold all my ounces and had that in BTC or other altcoins id be a millionaire right now. If i bought $3000 ripple in 2016 Jan at .005 USD per coin. it would be 160,000 USD Today

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