Bitcoin bear Peter Schiff predicts BTC ETF selloff will overwhelm spot market

Peter Schiff on Monday criticized the orange crypto for its price volatility and predicted that the Bitcoin ETF markets would further crash the BTC market on the chain.

The founder and chief economist and global strategist at Euro Pacific Capital said on Monday that a sell-off in Bitcoin ETFs this week will reveal the extent of the market’s problems during the weekend’s price drops.

Bitcoin ETFs recorded $237.4 million in outflows on Friday, according to data from Farside Investors.

Peter Schiff: More pain to come for Bitcoin ETFs

“Once Ethereum and Bitcoin ETFs open for trading, CNBC will no longer be able to sugarcoat the magnitude of the decline,” Schiff said. “This is because these drops will include the Saturday drops. If ETF investors sell instead of buy, liquidations could overwhelm spot markets.”

Once the #Ethereum i #Bitcoin ETFs open for trading @CNBC will no longer be able to sugarcoat the magnitude of the decline. That’s because those drops will include Saturday’s losses. If ETF investors sell instead of buy, liquidations could overwhelm spot markets.

— Peter Schiff (@PeterSchiff) August 5, 2024

The price of Bitcoin on crypto exchanges fell from a peak above $68,000 a week ago to below $50,000 on Monday as fears of a US recession gripped global markets in panic. Goldman Sachs recently raised its recession odds to 25%.

The painful losses wiped more than half a trillion dollars from the crypto markets in a matter of days, leaving 300,000 crypto traders affected.

The suitability of the BTC reserve assets in question

Schiff, an inveterate long-term Bitcoin skeptic, also took time on Monday to question Bitcoin’s value as a reserve asset for governments and central banks.

It’s a conversation that policymakers like Wyoming Sen. Cynthia Lummis (R) and former President Donald Trump have recently advanced. In July, Lummis proposed establishing a $67 billion strategic Bitcoin reserve.

This policy would diversify the US Treasury’s balance sheet into cryptocurrency and represent a radical change in the government’s stance towards Web 3 properties. Peter Schiff said that the recent crypto crash in the price of Bitcoin shows that it is not suitable as a reserve financial instrument for the policy of the civil body.

“This weekend’s #Bitcoin crash is an example of why Bitcoin will never be a reserve asset for any government or major central bank,” Schiff wrote. “A reserve asset must have relatively low volatility. Should be easily sold when needed. It can’t crash more than the assets it’s supposed to cover.”

This weekend’s #Bitcoin The crash is an example of why Bitcoin will never be a reserve asset for any government or major central bank. A reserve asset should have relatively low volatility. Should be easily sold when needed. It cannot crash more than the assets it is supposed to cover.

— Peter Schiff (@PeterSchiff) August 5, 2024

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