Why Crypto Is A Losing Game with Economist Peter Schiff

Crypto is all the rage. Everywhere you turn, it seems like there’s always a “next big thing” when it comes to cryptocurrencies or blockchain. The fact that it is so new means there are a lot of opportunities and potential rewards for those who invest early. It also means there’s a lot of risk.

The downside of putting money into crypto doesn’t seem to be as widely circulated as the benefits. That’s why I wanted to bring in financial expert and economist, Peter Schiff to help educate us on the risks associated with crypto and other matters related to dollars and investment.

This interview will explain why Peter thinks Bitcoin probably won’t take off anymore. He also discusses why dollars are valuable and why the US COVID policy is economically harmful. Lastly, he shares what we can do to prepare ourselves for financial struggles such as the dollar crash and so much more.

I’m excited to share this conversation with you, and I think you’ll find it valuable no matter where you stand on the topic. And now, please help me welcome the one and only, Peter Schiff to The School of Greatness!

Who Is Peter Schiff?

Peter Schiff is one of the few unbiased investment advisors to have correctly called the current bear market before it began and position his clients accordingly. As a result of his accurate forecasts on the U.S. stock market, economy, real estate, the mortgage meltdown, credit crunch, subprime debacle, commodities, gold, and the dollar, he is becoming increasingly more renowned.

Peter began his investment career as a financial consultant with Shearson Lehman Brothers after earning a degree in finance and accounting from U.C. Berkeley in 1987. As a financial professional for over twenty years, he is also the owner of Euro Pacific Asset Management and chief economist and global strategist for Euro Pacific Capital, a division of Alliance Global Partners. He is also Chairman of SchiffGold, a precious metals dealer based in Manhattan.

He has been quoted in many of the nation’s leading newspapers, including The Wall Street Journal, Barron’s, Investor’s Business Daily, The Financial Times, The New York Times, The Los Angeles Times, The Washington Post, The Chicago Tribune, The Dallas Morning News, The Miami Herald, The San Francisco Chronicle, The Atlanta Journal-Constitution, The Arizona Republic, The Philadelphia Inquirer, and the Christian Science Monitor. He also appears regularly on CNBC, CNN, Fox News, and Bloomberg TV, where his thoughts on the economy, foreign affairs, and the overall political and economic climate are discussed. He also authored the best-selling books Crash Proof: How to Profit from the Coming Economic Collapse and The Little Book of Bull Moves in Bear Markets: How to Keep your Portfolio Up When the Market is Down, published by Wiley in the late 2000s.

An expert on money, economic theory, and international investing, Peter is a highly recommended broker by many leading financial newsletters and investment advisory services. He even served as an economic advisor to the 2008 Ron Paul presidential campaign.

His expertise and credentials make me more excited to learn what Peter can offer us in this interview. So without further ado, let’s get right into it!

Why Cryptocurrency Is a Losing Game

Have you ever thought of investing in cryptocurrencies before? If so, I’m sure you’ve seen the massive rises in value that some coins have had over the past couple of years. A good example is Bitcoin, which many believe will be the future decentralized bank. As an investment advisor and financial expert for decades, Peter thinks this is not the case.

“The truth is the real success of Bitcoin rests on more people buying it. If you own it, you need to get many of your friends or colleagues to buy it because that’s the only way its prices go up. Bitcoin is not an asset like real estate where you can collect rent, stocks where you could collect a dividend or bonds where you get paid interest. … It’s not like a commodity where you actually can use it for something, like oil to generate power. … It’s not like gold, where you could make jewelry out of it or conduct electricity with it or use it in all sorts of industrial applications like other metals.” – Peter Schiff

This is precisely the reason why Peter doesn’t believe in cryptocurrency. It’s not backed by anything other than people buying it, which undermines its value. People will only purchase if they know others will buy too, which creates a massive bubble that can burst at any given moment. He believes that it’s just the same thing that happened during the .com bubble or the internet bubble period in the late 1990s, where many invested in internet-based startups filled with speculations that they’d be profitable soon. In the end, many of these companies failed, and the .com bubble burst, creating a massive economic crisis all around. That’s why he advises other investors to get out as soon as they can.

“It’s just a hype machine. … If Bitcoin will still be here in the next 20 to 50 years, it only means more people are gonna lose money. That’s because when more people pile into it, this means the bubble gets bigger and bigger. Then, there are a lot more losses when it pops.” – Peter Schiff

With this in mind, it might be safe to say that cryptocurrency may not be a suitable investment for everyone. Even though it has gained massive popularity over the past couple of years, it’s still a very volatile market where the price of coins can sometimes go down as well as up. For this reason, it’s best to be careful with your money and make sure you know what you’re doing before investing in it. You might end up losing all your earnings if things don’t work out the way they should.