A Renowned Economist Challenges Bitcoin Advocates
Prominent economist Peter Schiff has pushed back against Bitcoin enthusiasts who claim that cryptocurrency could someday resolve the United States’ massive national debt.
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Schiff expressed doubt over what he calls the exaggerated optimism of “Bitcoin pumpers” who suggest that 1 million BTC could pay off the country’s enormous $36 trillion government debt. According to Schiff, even with such a figure, the cryptocurrency would still fall short of addressing the mounting financial burden.
Bitcoin Still Insufficient for US Debt
Schiff argues that Bitcoin lacks the capacity to settle the staggering US national debt, pointing out that such a scenario would require an unrealistic surge in Bitcoin’s market capitalization by over 20,000%.
“#Bitcoin pumpers claim that if the U.S. buys 1 million Bitcoin, someday we will be able to use that Bitcoin to pay off the National Debt,” Schiff wrote. However, he explained that even at Bitcoin’s current value, 1 million BTC would barely make a dent in the $36 trillion debt.
At the current trading price of $102,286 per coin, 1 million Bitcoins would equal just $102 billion, a sum that pales in comparison to the US national debt of $36.25 trillion.
Market Cap Needs Unrealistic Growth
Schiff emphasized that for Bitcoin to achieve such a feat, its market capitalization would need to skyrocket to $761 trillion, a value over six times the global GDP.
“For 1 million Bitcoin to equal today’s $36.25 trillion National Debt, Bitcoin’s market cap would need to surge by over 20,000%,” Schiff remarked, dismissing such exponential growth as improbable.
He further argued that by the time Bitcoin hypothetically reaches such valuations, the US debt will likely have increased far beyond its current $36 trillion figure, requiring an even greater Bitcoin price to settle it.
Debt Continues to Grow
Schiff pointed out that the US government borrows money annually, which means the national debt will keep growing. As debt expands over time, he argues, Bitcoin’s theoretical ability to pay it off becomes even more unrealistic.
He warned that if Bitcoin’s market cap were to rise too dramatically, its price would likely face significant volatility and correction, which could undermine its role as a solution to government debt.
Bitcoin Is Not Yet a Global Currency
Schiff also questioned Bitcoin’s role as a global currency, arguing that despite its price surges, adoption remains limited. “There will not be global adoption. So far, very few people have adopted it at all,” he stated.
While some countries have taken steps to adopt Bitcoin as legal tender, most governments remain resistant to the idea of cryptocurrencies replacing traditional fiat systems.
“Bitcoin is a speculative asset, and its value is driven by hope, not real demand,” Schiff concluded.
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