Peter Schiff Against US Holding Bitcoin

Peter Schiff, a staunch Bitcoin critic in a recent X post has questioned the idea of the cryptocurrency serving as part of the U.S. strategic reserve.

Bitcoin Critic Questions Cryptocurrency’s Role in U.S. Strategic Reserve

Renowned Bitcoin critic and financial commentator Peter Schiff has expressed skepticism over the idea of the U.S. government including Bitcoin in its strategic reserve. This discussion emerged after Fundstrat's Tom Lee, during an appearance on CNBC's Squawk Box, suggested that BTC could be a solution to the budget deficit.

According to Lee, tax cuts and spending adjustments may not be sufficient to address the deficit, but Bitcoin could act as a hedge. He explained that as the price of Bitcoin rises, it would help offset liabilities linked to the deficit.

“Most @CNBC anchors are nothing more than paid #Bitcoin shills. @JoeSquawk said nothing when @fundstrat advocated that the U.S. government buy Bitcoin to drive the price higher so that it would have a valuable reserve asset to offset its soaring $36 trillion national debt.”

This discussion was sparked by Lee's suggestion on CNBC that adding BTC to the list of reserve assets could help offset a portion of the nation's massive $36 trillion debt, given the potential of the cryptocurrency to appreciate in value.

However, Schiff strongly反对disapproved of this idea, highlighting the liquidity risks involved. He noted that if the U.S. were to hold a significant amount of Bitcoin, any attempt to sell could easily trigger a market crash, rendering the reserve immediately ineffective.

“Even if you believe in Bitcoin such a plan is ridiculous. A large Bitcoin reserve would be worthless as a reserve asset, as the government could not sell without crashing the market,” he noted in his post.

Such a scenario, in his view, would go against the intended purpose of a strategic asset, which is to stabilize or enhance fiscal resilience. He argued that Bitcoin's volatility and illiquidity make it unsuitable as a serious reserve asset and cautioned against what he sees as misplaced optimism about its use by governments.

His later posts also show disapproval of Trump's win, sharing in a further post that consumer optimism is picking up over what he calls as ‘misplaced confidence in a Trump-inspired economic boom’.

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