Gold Bug Peter Schiff Calls Bitcoin 'Digital Fool's Gold'
This week CNBC broadcast a debate between financial markets commentator Brian Kelly, and gold proponent and economist Peter Schiff on the show “Fast Money.” The two finance experts discussed which was a better investment — Bitcoin or gold?
Bitcoin has been a contentious issue for gold bugs since the cryptocurrency was created. Over the past few years, economist Peter Schiff has expressed his opinion that bitcoin has no real value. Schiff’s debate with Brian Kelly is no different as he still believes bitcoins are no more valuable than “beanie babies.” However, CNBC’s Brian Kelly disagrees and thinks bitcoin’s value revolves around its usefulness spurring global demand. The human subjective valuations of gold as a “shiny rock” is the same as bitcoin’s, states Kelly.
Also read: Antonopoulos Details Bitcoin’s Protection Against Quantum Computing
Peter Schiff and Brian Kelly Debate: Bitcoin or Gold?
On Fast Money the financial markets news team discussed in detail the benefits of bitcoin investments compared to gold. “What is the better bet going forward gold or bitcoin?” the host of the show asked;
“Well for me obviously it’s Bitcoin,” explains the author and investor Brian Kelly. “Bitcoin is not just digital gold. I think that’s what a lot of people get wrong here. It’s a technology platform that fintech is being built on top of — It is a once in a generation investment opportunity similar to the internet, growing just as fast if not faster. It’s the internet of money. I’m not alone on this. Everybody’s involved in it — the Federal Reserve just released a paper on it and has a working group. Bank of England is involved in it, fourteen of the top thirty banks have active projects going on. JP Morgan, Goldman Sachs, CME, and NYSE are all involved in projects as we speak building on top of this technology.”
So let’s just say — let’s try to put a value on Bitcoin, and let’s say all those things don’t happen. Even though there are so many people working on it and building on top of the platform, giving it use cases — Let’s say it is digital gold and for some reason it just happens to get one percent of the market share that gold gets, bitcoin would be $4,500 and is trading at $1,200 right now — If it got five percent of the market share it would be at $22,000. That to me is a winning investment.
Schiff: ‘Bitcoin is Digital Fool’s Gold Similar to Beanie Babies’
As usual, the gold bug in Schiff remains unfazed by the comments of bitcoin supporters. In fact, during the debate, Schiff calls Brian Kelly a member of a “cult” who is obsessed with the digital currency.
“Well it’s not digital gold I agree,” details Schiff’s rebuttal. “It’s digital ‘fools gold’. You know today’s bitcoins are like beanie babies. The whole principle behind bitcoin was to replicate the properties that made gold uniquely suited to be money and act as an alternative to fiat currencies. But it’s not really viable as a money — I mean it is a potential medium of exchange, but it’s not a store of value. Meanwhile, nobody really uses it as a medium of exchange it’s just a speculative asset. People own it because they think it’s going to be more valuable in the future but it has no intrinsic value.”
Brian Kelly quickly interjects stating, “150,000 merchants worldwide accept bitcoin, including Expedia. [Bitcoin] has 300,000 transactions a day.” However, Schiff disagrees that merchants actually accept the digital currency. Schiff believes this is a “gimmick” and these companies who accept bitcoin are actually accepting dollars or euros.
“No, no. No merchants accept bitcoin,” explains Schiff. “They work with a company called Bitpay. They accept dollars. There are no merchants that price their merchandise in bitcoin. It’s impossible. It’s a gimmick to try and pretend.”
People are using it to circumvent currency laws to transfer money out of China. They are not really using it in commerce. You find me a merchant that is pricing in bitcoin. They are pricing in dollars or euros. — The volatility is too great on a daily basis to really price it. Gold had a long history of intrinsic value before it was money. People desired it for its properties, and it was very scarce, so it had a lot of value because its unique properties were hard to come by. Nobody knew what bitcoin was five or ten years ago. It didn’t exist. It has no value other than the fact that maybe you can use it to exchange it for something else.
‘Gold is Just a Shiny Rock’
Kelly counters arguing that bitcoin has the same usefulness that gold has. “Bitcoin has the exact same value as gold has,” Kelly shouts above Schiff’s commentary. “It has the same exact value as gold has… Gold is just a rock. It doesn’t have any special values. It’s just a shiny rock.”
Schiff responds: “There is no limit to the number of digital currencies that can be created. There are hundreds of others. Why doesn’t anyone use Myspace? Because somebody came up with Facebook.”
Poll: Who won the debate?
— CNBC's Fast Money (@CNBCFastMoney) February 27, 2017
The latest Fast Money debate on CNBC shows once again Schiff will not give bitcoin a chance as an investment, especially when compared to gold. Schiff has appeared many times on CNBC stating that bitcoin is basically worthless in his eyes. During the bitcoin price rise in 2013, Schiff said bitcoin was in a bubble and is similar to a “modern-day tulip mania.”
Notably, Schiff’s precious metals company has been accepting bitcoin for gold purchases since 2014.
What do you think about the debate between Brian Kelly and Peter Schiff? Do you think Schiff’s arguments against bitcoin are valid? Let us know in the comments below.
Images courtesy of Shutterstock and CNBC’s Fast Money.
Have you seen our new widget service? It allows anyone to embed informative Bitcoin.com widgets on their website. They’re pretty cool and you can customize by size and color. The widgets include price-only, price and graph, price and news and forum threads. There’s also a widget dedicated to our mining pool, displaying our hash power.
Related
The Infamous Bet: John McAfee's 2020 Price Target Shows BTC Undervalued by $37K
John McAfee is once again discussing the notorious wager he made back in November 2017 when he predicted that bitcoin… read more.
Digital Currency Donors and Crypto-Backed Endowments Fuel Higher Learning
Digital asset holders and organizations have been donating funds to a number of well-known universities. These days a slew of… read more.
