Peter Schiff: Bitcoin Can’t Buy Me

Peter recently appeared on the Shannon Joy Show, a podcast promoting liberty and independent thinking. Host Shannon Joy discusses Peter’s longtime criticisms of Bitcoin, and the two dive into gold’s future use as a money, as well as why Peter thinks cryptocurrencies are a bad investment.

Peter starts the discussion by comparing Bitcoin maximalists to a cult. Convinced to hold their Bitcoin indefinitely, they play the greater fool while others make money on a speculative bubble:

Their deity is Satoshi. That’s the leader of everything. No one really knows who he is. He’s a mystical figure that they worship. The credo is you buy your Bitcoin and you never sell it. If you own something that you can’t ever use, really what difference does it make what the price is? … The people who are getting rich on Bitcoin are the ones who are selling their Bitcoin.

Discussing the recent boom in Bitcoin’s popularity, Peter argues politicians like Donald Trump are pandering to the Bitcoin community without any regard for the benefits of policies like a government Bitcoin reserve:

He needs to get the young people. Well a lot of young people have Bitcoin because they haven’t grown up enough to realize that Bitcoin is nonsense too. So he got their votes, but the key is, by fully embracing Bitcoin and getting all the votes and the Bitcoiners, he didn’t lose  any votes to the non-Bitcoiners. People who don’t have an interest in Bitcoin didn’t even pay attention. They don’t care! 

Bitcoiners frequently question Peter’s motives for criticizing the cryptocurrency, but he could make a lot of money if he went along with the Bitcoin crowd:

A lot of people say I’m anti-Bitcoin because I’m doing that for engagement or strategy. Look, believe me, if I really was concerned about using Bitcoin for engagement, I would embrace it and come out in favor of it. In fact, I know that if I wanted to come out in favor of Bitcoin or any of these things, I could make a lot of money doing that. I could get myself involved with a company. I could get stock. I would be the best promotion that money could buy. The problem is you can’t buy me.

Peter promotes investing in gold because it’s a smart financial move, not because it makes him the most money:

A lot of the people in the Bitcoin community say, ‘Well, you know Peter, you’re just critical of Bitcoin because you have a gold business.’ I also have a brokerage and asset management business. That’s my main business, and when I recommend that people buy gold, that takes business away from my asset management company where I actually make more money from people if they send me their money to manage because I charge annual fees. If they take some of that money and buy gold, I actually make less money. But I still encourage people to buy gold because I think it’s the right thing to do.

In their final segment, an audience member asks Peter about ways to use gold in everyday life. He explains technology on the horizon that could enable gold-denominated transactions without the transaction costs of moving physical metals:

If I wanted to buy a cup of coffee and the merchant who sold the coffee wanted to get gold for his coffee instead of dollars or euros, there’s a mechanism where I could instantly transfer enough gold to cover that coffee, and the transaction can happen quicker and less expensively than Visa or Mastercard transactions. So gold, with the modern technology that we have, actually works a lot better today as money– as a medium of exchange, as a unit of account, as a store of value– than it has ever worked in the past. 

For Peter’s more technical treatment of Bitcoin, check out his latest debate with Robert Breedlove and Keith Knight!