On Monday, economist Peter Schiff questioned the U.S. government’s decision to hold Bitcoin (CRYPTO: BTC) as a reserve asset amid the apex cryptocurrency’s ongoing slump.
What Happened: Schiff took to X to point out that Bitcoin’s market value has plunged 30% from its January record high, dropping below $77,000.
“It’s hard to see the rationale for the U.S. government holding Bitcoin as a reserve asset when it can lose that much market value so quickly, ” Schiff remarked. “The rationale will be even harder to see when it’s down 50%.”
The backers of Bitcoin’s safe haven narrative swung into action, with award-winning investment manager Michael A. Gayed writing “Store of value” in response to Schiff’s post.
Over the past five years, Bitcoin has gained 1,408%, and 243% in the last two years.
However, Schiff was quick to clap back. “If the price can drop over 30% in less than two months without anything really happening, how can that be a store of anything. What if the government held Bitcoin in reserve and needed to sell it?”
Additionally, Schiff pondered the fate of the Bitcoin Strategic Reserve and the Digital Asset Stockpile, both established by presidential executive order last week, without congressional approval. He asked what would happen if Donald Trump’s successor president decided that the U.S. didn’t need such a Bitcoin Strategic Reserve or Crypto stockpile and decided to “sell it all.”
See Also: Microsoft May Have Given Bitcoin Investments A Miss But A Large MSFT Stock Holder Is A Strong Crypto, Blockchain Advocate
Why It Matters: Schiff’s comments come in the context of his ongoing criticism of the government’s decision to create a Bitcoin strategic reserve. He previously predicted that this move could damage the U.S. dollar.
He has also branded such investments a “waste of resources,” arguing that they divert capital from real wealth creation.
The cryptocurrency market extended losses Monday as Bitcoin slumped below $77,000 to hit a four-month low
Price Action: At the time of writing, Bitcoin was exchanging hands at $79,434.23, down 3.47% in the last 24 hours, according to data from Benzinga Pro.
Image via Shutterstock
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