One financial commentator warned against this Bitcoin The US dollar will likely weaken if the government intervenes in the cryptocurrency.
Economist Peter Schiff believes that if the US government decides to adopt the first cryptocurrencies, it will have a negative impact on the US currency by inflating the money supply.
Unexpected consequences
Schiff, a well-known Bitcoin critic, said there would be unforeseen consequences for the currency’s value US dollar Once the US government continues its plan to interfere in Bitcoin markets, which could lead to an unsustainable economic bubble.
The financial commentator believes that the rise in the price of Bitcoin is largely fueled by government intervention, noting that it may have a negative impact in the long term that could eventually lead to the collapse of the global currency.
In his post, Schiff said that cryptocurrency could destroy the US dollar because the government has adopted it.
Ironically, #Bitcoin It may end up destroying the dollar eventually — not because it replaces the dollar as the global reserve currency, but because the U.S. government embraces Bitcoin, prints trillions of dollars to buy it, and fuels a larger bubble that dissipates the country’s wealth.
– Peter Schiff (@PeterSchiff) December 5, 2024
“Ironically, #Bitcoin may end up destroying the dollar after all – not because it replaces the dollar as the global reserve currency, but because the US government embraces Bitcoin, prints trillions of dollars to buy it, and fuels a larger bubble that dissipates the digital currency. The nation’s wealth,” Shiv said.
According to him, the US government’s widespread adoption of cryptocurrencies means buying Bitcoin with the newly printed currency will likely inflate the money supply, adding that the US could end up with a full-scale economic bubble.
He added that such interference in the cryptocurrency space could also reduce investor confidence in the US currency.
BTCUSD trading at $99,325 on the daily chart: TradingView.com
Political pressure
Schiff argued that it was Bitcoin’s exponential growth that allowed it to transcend the world $100,000 mark He does not rely on organic market demand, saying that cryptocurrencies have reached this milestone due to political pressure and government support.
It is ironic that #Bitcoin You can get $100k just by buying politicians and dealing with the government. Without the expected government intervention, this achievement would never have been possible. What could not be achieved in the free market was achieved through the cohesive power of the state.
– Peter Schiff (@PeterSchiff) December 5, 2024
“It’s ironic that #Bitcoin only reached $100,000 through politicians buying up and aligning with the government,” Schiff said.
As an economist, Schiff is concerned that the government-backed momentum around the Alpha cryptocurrency could lead the United States down the road to an economic bubble.
Bitcoin may not have reached $100,000 per coin without government influence, he said.
“Without anticipated government intervention, this achievement would never have been possible,” he explained. “What could not be achieved in the free market was achieved through the cohesive power of the state,” he explained.
Criticism of the proposed Bitcoin reserve
Schiff criticized the proposal to create a national bitcoin reserve, arguing that purchasing large amounts of bitcoin could destabilize the dollar.
US President-elect Donald Trump proposed creating Bitcoin reserve Which Schiff said is a proposal that would require the US government to purchase large amounts of cryptocurrencies every year. He predicted that the United States would end up owning one million Bitcoins.
The financial commentator said that the United States may have to sell its gold reserves to finance its purchases of Bitcoin to build its reserves.
He warned that it could lead to a financial crisis because it might give the impression that Bitcoin is more viable than the US dollar, adding that it would reduce the global dominance of the US dollar because investors would lose confidence in the currency.
Featured image from Pexels, chart from TradingView