TLDR
- Peter Schiff criticized Bitcoin ETFs, saying they defeat the purpose of owning Bitcoin directly.
- Schiff argued ETFs make Bitcoin centralized, easily seized, and unusable for payments or cross-border transfers.
- Some Bitcoin supporters agreed with Schiff’s points about the benefits of owning Bitcoin directly.
- Schiff warned that ETF buyers only care about price, not Bitcoin’s core principles.
- Bloomberg analyst Eric Balchunas compared Bitcoin ETFs to gold ETFs in response to Schiff’s criticism.
Peter Schiff, a well-known economist and Bitcoin critic, recently shared his thoughts on Bitcoin exchange-traded funds (ETFs). His comments have started a conversation about the pros and cons of owning Bitcoin through ETFs versus holding it directly.
On Tuesday, Schiff posted on social media platform X that owning Bitcoin in ETFs “defeats the entire purpose of owning it in the first place.” He listed several reasons for this view. According to Schiff, Bitcoin held in ETFs is “no longer decentralized” and “not peer-to-peer.” He also said it’s “easily seized by authorities” and “can’t be used as a currency for payments, or transferred across borders.”
Peter Schiff spitting facts!
— Crypto Rover (@rovercrc) August 6, 2024
Schiff summed up his argument with the popular crypto phrase, “It’s not your keys, not your coins.” This saying means that if you don’t control the private keys to your Bitcoin, you don’t truly own it.
Some Bitcoin supporters agreed with parts of Schiff’s statement. Aubrey Jesseau, CEO of Beaver Bitcoin, told Decrypt, “If what Schiff says is true, Bitcoin might just be the best form of money the world has ever seen.” Jesseau’s company helps customers buy Bitcoin and store it in their own wallets, rather than leaving it on an exchange.
Jesseau added, “Buy Bitcoin and hold it in a wallet you control. No exchange, no leverage, no yield scheme. Just the best-performing asset of all time in a digital vault only you can open.”
Other Bitcoin fans also chimed in. Peter McCormack, host of the What Bitcoin Did podcast, jokingly tweeted that Schiff was “learning” about Bitcoin’s benefits.
Eric Balchunas, a Bloomberg analyst who has reported on Bitcoin ETFs, agreed that Schiff made a “fair point.” However, Balchunas questioned how Bitcoin ETFs are different from gold ETFs or gold mutual funds. He asked if the motto for gold should be, “Not sitting in your own safe, not your gold.”
Schiff, who is known for favoring gold over Bitcoin, later explained his views further. He said that buyers of Bitcoin ETFs “only care about price” and aim to “cash out with profits.” Schiff warned that this behavior shows “the pyramid scheme will soon collapse.”
Schiff has continued to voice concerns about Bitcoin’s future. On Sunday, he warned about potential “mass ETF liquidations” and a “Crypto Black Monday.” He predicted that Bitcoin falling below $38,000 could trigger large sell-offs, with the “actual short-term bottom” possibly dropping below $20,000.
It’s worth noting that while Schiff argues Bitcoin in ETFs can be easily seized, authorities have also seized Bitcoin held outside of ETFs. In late 2022, around 50,000 Bitcoin linked to the Silk Road online marketplace were taken by government authorities.
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