Friday, December 22, 2017

Peter Schiff says bitcoin is going to zero. That's exactly why you should buy every dip.

Peter Schiff, the guy who has been so wrong about everything, is now saying that bitcoin is going to zero. This is why you should probably buy every single dip.

Remember Schiff's predictions?

QE will cause hyperinflation.
The Chinese will stop "lending" to us and interest rates will skyrocket.
Gold is going to $10,000.

And more.

Bitcoin is not a bubble. It's a symptom of the world's desire to "de-dollarize." And while it will not become any kind of mainstream currency anytime soon because of its highly finite nature (like a gold standard or fixed FX regime, only worse), it reflects the desire on the part of people, institutions and nations to diversify out of the dollar.

The need to move away from the dollar has been prompted by increasingly aggressive and antagonistic policy emanating out of Washington. It's policy that is intended to use the dollar and the global, dollar-based, clearing and transaction system as a weapon.

No nation, not even one that is a U.S. ally, can afford to have the risk of being shut out of that system so the search is on for alternatives. Witness--bilateral, non-dollar trade agreements in yuan between Russia and China. Venezuela accepting yuan for payment of oil. Yuan-based oil trading, etc.

Technology (blockchain, etc) and need (US policy) have created the impulse behind bitcoin. There will be other cryptocurrencies emerging and, like I said, none of them will end up being the new global currency, but the desire to diversify into non-dollar units of account is very real and that means bitcoin is not a bubble.

9 comments:

JKH said...

Good description of what's driving it.

It's the ultimate Keynes beauty contest - but battling the constraint that it has no nominal anchor.

Kaivey said...
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Kaivey said...

Well, you can't get better advice than that. I was thinking even if it did crash you can't lose if you're in it for the long run because it will soon pick up again.

Tyler Healey said...

Well said, Mike. I think the cryptocurrency rise might also be driven by the fact that so many people are poor, and it's well known now that you can buy a small amount of crypto and make an excellent return.

Noah Way said...

The poor aren't buying bitcoin, they're too busy paying the minimums on their debt.

Funny how people who are well-off are unable to comprehend how bad it is economically for so many.

Matt Franko said...

It'll go to zero when libertarianism goes to zero...




Tyler Healey said...

I should have said “the working class.” There are plenty of workers who can and should buy $20 of a cryptocurrency.

Ryan Harris said...
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GLH said...

I wouldn't make any decision based on anything Peter Schiff says.