Schiff on X Spaces: Bitcoin is Plummeting

On Monday’s X Space, Peter delivers a stark warning on the fragility of the Bitcoin bubble, escalating inflation risks, and why a return to sound money via a gold standard may be inevitable. Diving into recent market turmoil, he cautions investors about the impending crypto collapse, analyzes misguided tariff strategy, and emphasizes the value of international diversification and precious metals as protection against looming economic turmoil.

Peter opens with a blunt assessment of Bitcoin’s predicament, singling out MicroStrategy’s Michael Saylor and warning crypto speculators about the impending implosion. Contrasting crypto with the emergence of artificial intelligence investments, he sees potential in one, disaster in the other:

And so Bitcoin’s going down. If you really love your Bitcoin, just wait till Michael Saylor is forced to sell and then buy it. It’s going to be a hell of a lot cheaper. It’ll be cheaper than you can even imagine. If you still want to buy it back then, you could do it. Look, the AI stuff, I think there’s some—there’s real potential in AI. There’s no potential in this crypto crap and Bitcoin. So all those crypto stocks, don’t even try to catch the falling knife. I would sell and forget it. But I do think at some point, you know, some of the AI stuff is going to be a good buy. But I still think there’s probably more downside.

He offers evidence of the divergence between the dropping U.S. market and the rising international markets, a rare occurrence highlighting deeper problems in American financial bubbles:

This is really the first time I’ve seen a big drop in the U.S. market where not only did we not have a drop in the foreign markets, where the foreign markets have gone up. I mean, until today, my international dividend payer fund was up 15% on the year. Now, it was down a bit today, maybe a percent. … But the thing is, you ain’t seen nothing yet. There’s a lot more downside because there’s so much air that needs to come out of these bubbles and there’s still a lot of real value around the world. People have been ignoring value to buy all this hype and momentum. It was all great when everything was going up, but when the party ends, the hangover is incredible.

Peter predicts policymakers will again succumb to bailout pressures and quantitative easing (QE). He criticizes the widespread abandonment of free-market principles during economic downturns:

Well, they’re going to do all of them. I mean, first of all, they’re going to have to go back to QE because if they just cut interest rates, it’s not going to do anything about the long end. The long end will probably go up. So the Fed’s going to have to go to QE. And I think, you know, Trump and the Republicans are going to abandon all this free market stuff. You know, there’s a saying that there is no atheist in foxholes. Well, in a recession, there are no free market, you know, guys. Everybody wants the government to do something. Everybody wants a government bailout. Nobody is willing to say, we have to suck it up and deal with the pain.

Peter doubles down on his bearish crypto outlook, forecasting a catastrophic drop once speculative investors panic-sell, crippling Bitcoin further:

I think that what’s going to happen in this decline, and I don’t know when it’s going to hit big, but at some point, maybe when Bitcoin cracks back below 50,000 or 40,000, you’re going to get mass selling from the ETFs, and that’s just going to implode the market. I mean, really implode the market. We could be looking at an easy sub 20,000, maybe sub 10,000 on that kind of big liquidation.

Ultimately, Peter argues that the fiat currency experiment has an expiration date, and a return to the gold standard will inevitably emerge to restore confidence in currency and stabilize economies:

I think eventually we’ll be back on the gold standard because I think once there’s a complete loss of confidence in fiat currency, once you have really rampant inflation in the major economies, especially the United States, in order to reinstill confidence in the money, I can’t think of anything other than a return to a gold standard that would do it. So I think we’re going to go back there. It’s not an accident that we’ve used gold for thousands of years as money.