As a seasoned financial analyst with decades of experience under my belt, I have witnessed the rise and fall of numerous financial trends, from dot-com bubbles to housing market crashes. However, none have left me as bewildered as the meteoric rise of Bitcoin.
Without a doubt, Bitcoin – the digital currency with the highest market value – has faced its fair share of skepticism and scrutiny from economists, political figures, banking professionals, and financial investors alike.
ever since its debut in 2008, Bitcoin (BTC) has faced numerous critical and doubtful assessments, with some naysayers labeling it as a fraudulent scheme or predicting its imminent collapse to worthless levels.
Over time, as Bitcoin evolved and developed, some initial critics have transformed into supporters, while others have softened their arguments against the digital currency.
Despite Bitcoin exceeding $100,000 for the first time ever in December 2024, there are still skeptics in the cryptocurrency world who refuse to concede defeat and continue to wager on the downfall of this flourishing digital landscape.
2024 saw Bitcoin reaching unprecedented peaks, yet there were some analysts who, despite being associated with CryptoMoon, remained unconvinced or outright dismissive of Bitcoin’s value.
Peter Schiff: “Bitcoin may end up destroying the dollar”
Known for his advocacy on gold investments, American financial advisor Peter Schiff, has consistently been a vocal critic and long-term skeptic of Bitcoin.
Since at least 2013, economist Schiff has been vocal about his criticism towards Bitcoin, as its value ranged from $100 to $1,000 back then. However, despite his skepticism, Schiff’s son Spencer, seemingly unfazed by his father’s views, shifted all of his investments into Bitcoin in 2021.
It’s likely that the prediction made by investor Schiff about Bitcoin not surpassing $100,000 in 2019 proved to be incorrect, as the price of Bitcoin has since reached and even exceeded this mark.
Regardless of his incorrect forecast, Schiff persists in criticizing Bitcoin, voicing apprehensions over the potential action by the U.S. government to establish a strategic Bitcoin reserve.
In an ironic twist, Bitcoin could potentially bring down the U.S. dollar if the government adopts it extensively. This is due to the scenario where the U.S. government purchases trillions of dollars’ worth of Bitcoin, causing a larger bubble and ultimately depleting the nation’s wealth. Peter Schiff expressed this perspective as Bitcoin reached $100,000 for the first time on X.
In a later blog post dated December 8th, Schiff labeled Bitcoin as a “significant national security concern” and “the most wanted adversary,” suggesting that the U.S. could employ citizen funds to acquire Bitcoin.
Paul Krugman: “Crypto is for criming”
Paul Krugman, a renowned American economist and journalist, was bestowed with the 2008 Nobel Prize in Economic Sciences for his contributions to the field of economic geography and international trade dynamics.
As a consistent critic of Bitcoin over time, Krugman has frequently faced mockery within the cryptocurrency sphere due to his earlier forecast in 1998, which underestimated the internet’s potential and claimed it would never surpass the relevance of the fax machine.
Just like Schiff, Krugman has been criticizing Bitcoin since the cryptocurrency’s early years.
2013 saw Paul Krugman penning an article for The New York Times, entitled “Bitcoin is Evil”, in which he expressed profound skepticism towards Bitcoin because it lacked fundamental characteristics that are typically associated with money.
In another article from 2022, Krugman stated that “Cryptocurrencies are largely operating as a Ponzi scheme, and it seems this could be the time when the scheme has exhausted its supply of new investors.
Bitcoin soaring to $100,000 while Krugman was retiring from The New York Times on December 6 didn’t halt his critique of cryptocurrency. Instead, it continued.
December 16th saw the publication of Paul Krugman’s blog post, entitled “Cryptocurrency Empowers Criminal Activities,” echoing a common argument against Bitcoin by its skeptics.
He argued that while cash banknotes are an “awkward medium for really large-scale criminal activity,” cryptocurrencies like BTC are a better tool for illegal transactions.
perhaps cryptocurrency is not digital gold, but rather the equivalent of $100 bills globally involved in illicit activities.
ECB execs: “Bitcoin has failed on the promise to be a global decentralized digital currency”
It seems that, in 2024, the European Central Bank (ECB), responsible for the development of the European Union’s central bank digital currency (CBDC) – the digital euro, appeared less than thrilled by Bitcoin’s prosperity.
Last October, two officials from the European Central Bank (ECB), namely its Payments Director, Ulrich Bindseil, and an ECB Advisor, Jürgen Schaaf, authored a report that highlighted potential disparities stemming from the use of Bitcoin.
In the research, scholars urged those who don’t own Bitcoin to push for laws restricting its use. They claimed that initial and current Bitcoin owners take advantage of new buyers by selling Bitcoin at a premium.
In early 2024, as the U.S.’s first Bitcoin exchange-traded funds began trading, ECB’s Bindseil and Schaaf didn’t hesitate to voice their criticism towards Bitcoin. Their statement read:
“Bitcoin has failed on the promise to be a global decentralized digital currency. Instead, it is used for illicit transactions. The latest approval of an ETF doesn’t change the fact that Bitcoin is not suitable as a means of payment or as an investment.”
Back in November of 2022, I came across an intriguing piece on the European Central Bank’s blog titled “Bitcoin’s Last Stand.” The authors, Bindseil and Schaaf, put forth an argument that resonated with me as a crypto investor: they suggested that Bitcoin is seldom utilized for legitimate transactions.
While bashing BTC, Bindseil and Schaaf have been regularly praising a potential European CBDC.
In 2020, Bindseil referred to Central Bank Digital Currencies (CBDCs), including the yet-to-be-released digital euro by the European Central Bank, as the “most secure method for transactions,” asserting:
“This [digital euro] should be game-changing as this implies that the ECB would be directly governing monetary payments […] The credibility of the payment system then depends on trust in the ECB and no longer in banks or the financial system.”
Jamie Dimon: “I call it the pet rock”
In 2024, it seems that Jamie Dimon, CEO of the largest U.S. bank, JPMorgan Chase, continues to express strong reservations towards Bitcoin, even though JPMorgan is actively participating in exchange-traded funds (ETFs) focused on Bitcoin trading.
In early 2024, a long-time critic of Bitcoin, Dimon, announced that he had no further interest in discussing Bitcoin. He stated this despite the historic launch of spot Bitcoin ETFs on January 11th, asserting that he remains indifferent towards cryptocurrency.
In response to discussing Bitcoin with CNBC, Dimon expressed that it was his final conversation on the topic, stating emphatically, “This is my last word on Bitcoin, by Heaven’s grace, likening it to a ‘pet rock.’
It’s not certain if Dimon has shifted his opinion about Bitcoin, given its recent record-breaking heights since Donald Trump’s victory in the elections.
In July, a person often referred to as America’s initial “Bitcoin president,” Donald Trump, allegedly revealed that the CEO of JPMorgan Chase had shifted his stance on Bitcoin. However, since January, this individual has stuck to his vow to avoid public discussions regarding cryptocurrencies.
In November, it was reported by Reuters that Dimon did not intend to be part of Trump’s administration, even though there were queries about his possible acceptance of a high-ranking government position following the election.
Rafi Farber: “When you buy Bitcoin, you’re just spreading the US inflation”
Rafi Farber, the young publisher of End Game Investor, a platform focusing on the gold market, is likely one of the Bitcoin skeptics in the field.
From a standpoint that unlimited printing of money could lead to a currency’s downfall, Farber questions the sustainability of Bitcoin because its increasing value results in more money being generated.
On December 5th, the financial journalist openly confessed his displeasure over Bitcoin’s record-breaking value compared to gold in a published blog post. Despite this, he remains confident that Bitcoin will not withstand a potential economic downturn or banking crisis when the US dollar is under pressure.
In November, Farber delved into the relationship between Bitcoin, the Tether USDt stablecoin, and U.S. Treasury bonds on his YouTube platform.
According to Farber, Tether’s value is tied to U.S. Treasury securities, which in turn support the U.S. dollar. This dollar is what you receive when you redeem Tether, a digital token often used to purchase Bitcoin. Notably, Bitcoin itself is also linked to Tether, which ultimately derives its value from U.S. Treasury securities and the U.S. dollar.
“This is a spiral of monetary nothingness spinning in the air, and when you buy gold and silver, you’re taking that money out of the merry-go-round. When you buy Bitcoin, you’re just stimulating the price of Treasurys and you’re spreading the US inflation, and continuing the power of the deep state.”
Although Farber currently holds a skeptical opinion, he hasn’t closed the door on potentially shifting his perspective regarding Bitcoin in the future. However, he requires observing how it behaves during a worldwide financial crisis before making any decisions. As he put it:
“When that is triggered, if Bitcoin can maintain stability on gold ounce terms — not in dollar terms, I don’t care about dollars — then I will admit that Bitcoin is a viable gold derivative, and therefore not money itself, but a viable derivative of money, which can be used in commerce.”
He mentioned that it seemed unlikely, based on the recent decline in Bitcoin’s value from roughly 37.5 ounces of gold to around 10 ounces during the latest Bitcoin crash.
According to Farber’s prediction, the upcoming fall of Bitcoin compared to gold could be more severe than what we’ve seen so far. This could happen once bank reserves dip below the $3 trillion mark, a situation that may occur quite soon.
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2024-12-27 18:04