One financial commentator warned that <a target="_blank" href="https://www.coingecko.com/en/coins/bitcoin” target=”_blank” rel=”noopener nofollow”>bitcoin It could potentially weaken the US dollar if the government intervened in the cryptocurrency.
Economist Peter Schiff believes that if the US government decided to adopt the first-born cryptocurrency, it would have an adverse effect on the dollar by inflating the money supply.
Unforeseen consequences
Schiff, a well-known bitcoin critic, said there will be unforeseen consequences on the value of the <a target="_blank" href="https://www.xe.com/currencycharts/?from=btc&to=USD” rel=”nofollow noopener” target=”_blank”>US dollar once the US government continues with its plan to intervene in the bitcoin markets, which could lead to an unsustainable economic bubble.
The financial commentator believes that the rise in bitcoin price is largely due to government intervention, and says it could have a long-term negative effect that could eventually lead to the collapse of the global currency.
In a post, Schiff argued that cryptocurrency could destroy the US dollar because the government adopted it.
<blockquote class="twitter-tweet”>
Ironically, <a target="_blank" href="https://twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>#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 adopts bitcoin, prints trillions of dollars to buy it, and fuels a larger bubble that wastes the nation's wealth.
—Peter Schiff (@PeterSchiff) <a target="_blank" href="https://twitter.com/PeterSchiff/status/1864752591982280778?ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>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 adopts bitcoin, prints trillions of dollars to buy it, and fuels a larger bubble that wastes the money. the wealth of the nation,” Schiff commented.
According to him, a large-scale crypto adoption by the US government would mean buying bitcoin with newly printed currency, which could potentially inflate the money supply, adding that the US could end up in a large-scale economic bubble. scale.
He added that such crypto intervention could also decrease investor confidence in the US currency.
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BTCUSD trading at $99,325 on the daily chart: TradingView.com
Political lobbying
Schiff argued that bitcoin's exponential growth that allowed it to go beyond the <a target="_blank" href="https://www.manilatimes.net/2024/12/06/tmt-newswire/pr-newswire/bitcoin-breaks-100k-amid-market-volatility-november-option-volatility-report-by-bybit-and-block-scholes/2017517″ target=”_blank” rel=”noopener nofollow”>$100,000 mark is not driven by organic market demand, saying that the cryptocurrency reached that milestone due to political lobbying and government support.
<blockquote class="twitter-tweet”>
It's ironic that <a target="_blank" href="https://twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>#bitcoin He only reached $100,000 by buying politicians and sleeping with the government. Without the expected government intervention, this milestone would never have been achieved. What could not be done in a free market was achieved through the cohesive power of the State.
—Peter Schiff (@PeterSchiff) <a target="_blank" href="https://twitter.com/PeterSchiff/status/1864506441232744577?ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>December 5, 2024
“It's ironic that #bitcoin only reaches $100,000 by buying politicians and sleeping with the government,” Schiff said.
As an economist, Schiff worries that a government-backed push into alpha cryptocurrency may be putting the United States on the path to an economic bubble.
He said bitcoin might not have reached $100,000 per coin without government influence.
“Without the expected government intervention, this milestone would never have been achieved. What could not be done in a free market was achieved thanks to the cohesive power of the State,” he explained.
Criticizing the proposed bitcoin reserve
Schiff criticized the proposal to establish a national bitcoin reserve, arguing that buying large amounts of btc could destabilize the dollar.
US President-elect Donald Trump has been proposing the creation of a <a target="_blank" href="https://www.forbes.com/sites/digital-assets/2024/12/05/elon-musk-quietly-fuels-us-bitcoin-reserve-bets-as-price-breaks-100000/” target=”_blank” rel=”noopener nofollow”>bitcoin reserve which Schiff said is a proposal that will require the US government to purchase large amounts of cryptocurrency each year. He predicted that the United States could end up having 1 million Bitcoins.
The financial commentator said that the United States could be forced to sell its gold reserves to finance its bitcoin purchases and increase its reserves.
He warned that it could lead to a financial crisis because it could give the impression that btc is more viable than the US dollar, adding that it will decrease the global dominance of the US dollar because investors will lose their confidence in the currency.
Featured image from Pexels, chart from TradingView
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