The US Government Is Predicted To Have Bitcoin Reserves, Economist Peter Schiff: This Could Destroy Dollars!
JAKARTA - Donald Trump's victory in the recent US presidential election sparked public speculation about the economic policies his government will take. This includes the possibility of making Bitcoin a state reserve fund aka Bitcoin Reserve. A number of crypto figures welcome this idea, they also expect crypto regulation to support the industry.
However, Bitcoin economist and critic Peter Schiff has rejected this discourse. Schiff warned that the effort could pose a major risk to US economic stability. Schiff believes that large purchases of Bitcoin by the government could drive uncontrolled inflation, even undermining the value of the US dollar.
According to Schiff, if the United States buys large amounts of Bitcoin, for example 1 million BTC worth 87 billion US dollars (Rp1,348.5 trillion), the negative impact is greater than the positive impact. Even so, this effort is predicted to make the price of Bitcoin plummet, which ultimately allows long-term Bitcoin holders to sell their assets at very high prices.
He assessed that this massive sales could actually result in a drastic decline in market prices, forcing the government to buy more Bitcoins to maintain price stability.
SEE ALSO:
Furthermore, Schiff revealed that policies related to Bitcoin purchase plans will sustainably reduce the real value of the reserve, and in the end, the government will have to print more US dollars to continue the purchase. If this continues, the excessive money printing cycle could potentially trigger hyperinflation and undermine the value of the US dollar.
On the other hand, some observers rate Schiff's prediction to be too pessimistic. Cynthia Lummis, a senator from pro-Bitcoin Wyoming, proposes to purchase Bitcoin in stages over five years, not directly 1 million BTC. Lummis argues, with this gradual accumulated plan, price volatility can be suppressed and Bitcoin reserves will not trigger a sudden price spike as Schiff fears.
On social media X, Lummis expressed his belief that this step could strengthen the US economic position and increase the confidence of international investors.
Although many crypto figures see great opportunities in this policy, Schiff still believes that Bitcoin is just a speculative phenomenon that will evaporate over time. "Bitcoin, crypto, and blockchain technology are likely to be listed as one of the great examples of popular illusions in history. When this bubble breaks, losses will be enormous," Schiff wrote on social media X, November 12, 2024.