Bitcoin Is Gold 2.0: Right Or Wrong?

Peter Schiff discusses on CNBC whether bitcoin is a new, modern form of gold (say gold 2.0). This is what Schiff had to say:

To me, it looks like a modern-day tulip mania. A bubble is a bubble, whether it was the dot-com or the real estate bubble. There is a bubble in bitcoins. I think the reason that people are buying bitcoins is because they think they are going to make money; they think the price is going to go up. And the price probably will go up until it implodes.

A lot of people are going to loose a lot of money in bitcoins, a small number of people will make a lot of money, but it will be paid for by a much greater number people who lose because they are coming at the end of the pyramid scheme. Whether we are at the top now or whether it will keep going on for months or years I don’t know.

I mean, you can play the game if you want but I don’t see bitcoins as an alternative to gold. It is not a modern day gold standard. If anything, they are modern-day alchemists but you can not make gold digitally. It is no better than a fiat currency.

When people talk about the fact that there is a finite supply of bitcoins you can break your bitcoins down into many pieces so there is plenty of bitcoins for everyone (certainly if the price keeps going up). But I don’t think it is going to end up being a source of commerce for the world.

I think right now it is a source of gambling. I think people will lose a lot of money. Again I do not know where the top is (I never know where the top is), but I think I have a pretty good vision when it comes to seeing bubble and I certainly see one in bitcoins.

 



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