It’s always more interesting to watch what people do rather than say. Peter Schiff has been talking about bitcoin for a long time, and always in a bad way. But what will he do when the fiat economy forces him to act against his predictions?
Who is Peter Schiff?
Peter Schiff is an economist of the “classical school” and happens to be the object of ridicule by bitcoin-maximalists. His idea is that bitcoin is a “bubble” and has no economic value. Schiff’s pessimistic assessments were made both when BTC was $1 and at its peak price of $69,000.
Perhaps any other public expert would be ashamed or suffer from manic-depressive disorder by now. But Peter Schiff is kept afloat due to bear markets. This is his finest hour: at such moments, everything falls, “just as he has warned”.
What happened to Schiff’s business?
“Since the market is bearish, it’s Peter Schiff’s finest hour again,” you might say. But you would be only half right. Indeed, the market is falling, and there is a crisis, but Schiff personally is not happy about being right.
The news spread worldwide that his private bank Euro Pacific has been sanctioned by the financial regulator of Puerto Rico and can be declared insolvent.
Schiff said that he solved the financing problem quickly and found a possible buyer of the bank, which would provide the entity with the necessary liquidity. But he has not yet received permission for such a deal. Thus, the interests of the bank’s customers could be affected, as their accounts are currently blocked.
“Welcome to the world of centralized finance!”
With roughly such “greetings,” Schiff was addressed by several prominent influencers at once. One of them was the president of El Salvador, Nayib Bukele, who was criticized by Schiff for every “drawdown” of the Salvadoran bitcoin wallet. Recall that El Salvador officially uses bitcoin as a means of payment and so far, has more than $50 million in floating losses on its BTC purchases.
One user on Twitter asked the logical question about what Schiff would do if there was an option to sell the bank for bitcoins. Peter responded that he would accept such an offer because his primary interest is taking care of his clients.
The situation is developing at a bitcoin price of around $21,500, and Peter Schiff claimed that the following support for the market would be the $10,000 level. If that happens, every $1 million in bitcoin received for the bank will turn into slightly less than $500,000.
It turns out that either Schiff deceives himself by making such pessimistic predictions (which is unlikely, considering how categorical he was when he published them), or he accepted the reality: his fiat business can lose its whole value, taking the reputation of the proprietor with it.
A piquant point: technically, a bitcoin transaction would be absolutely equivalent to an ordinary bitcoin purchase on the spot market. And one can only imagine the resonance in the profile social networks: Peter Schiff invests in BTC!
Can bitcoin cost zero?
We can answer briefly and unambiguously to this “Peter Schiff’s riddle”: “No, it can’t.” There are already nearly a million people worldwide who own a whole bitcoin or more. Most of these coins have an average purchase price of much more than $1,000.
Assuming some force managed to downgrade the market price of bitcoin below that level, investors would have three options:
We can endlessly fantasize about what they will do (in fact, all options are possible). But if the same question is projected on the next group of bitcoin-holders with a balance starting from 0.01 BTC, we will get the sample of 10 million addresses (according to Glassnode). Will these investors panically try to save their $10? Or is it more likely that they will want to reach the balance of a whole bitcoin? The question seems rhetorical.
Thus, even at the current initial level of acceptance, one could argue that there is enough critical mass and demand to keep bitcoin from being worth absolutely nothing.
