Amid the ongoing Bitcoin (BTC) and general cryptocurrency market sell-off, American economist Peter Schiff has warned that the maiden digital asset may face further losses.
In an X post on August 5, Schiff, a known Bitcoin critic, noted that based on recent performances, the asset is headed for what he describes as a “graveyard.”
Schiff expressed frustration and skepticism regarding Bitcoin investors‘ attitudes, accusing them of being in denial about the true state of the market. He argued that many Bitcoin holders are failing to recognize the severity of the situation, likening their optimism to “whistling past a crypto graveyard.”
Previously, Schiff acknowledged that Bitcoin recently fell below its March lows, now trading at approximately $51,000. This drop represents a notable 20% decline from the levels observed when Bitcoin ETFs closed last Friday. The American economist characterized this development as a “Crypto Black Monday.”
The Euro Pacific Asset Management founder also doubled down on his criticism in another post, suggesting that the Bitcoin crash proves why the digital asset cannot serve as a reserve asset. In his view, BTC’s high volatility disqualifies it as a reliable reserve asset.
“This weekend’s #Bitcoin crash is an example of why Bitcoin will never be a reserve asset for any major government or central bank. A reserve asset must have relatively low volatility. It needs to be readily sold when needed. It can’t crash more than assets it’s supposed to hedge,” he added.
Impact of Bitcoin ETFs
The current decline follows a period of heightened interest and investment in Bitcoin, partly driven by the introduction of Bitcoin ETFs and growing institutional interest. However, Schiff’s analysis suggests that these factors may not be enough to sustain Bitcoin’s value in the face of ongoing market volatility.
The gold bug also noted that Bitcoin ETF investors are not committed for the long haul, alleging that the current downturn is unprecedented for them and offers a “rude awakening.”
His remarks come amid heightened volatility in the cryptocurrency market, partly driven by growing concerns about a possible recession in the United States.
Bitcoin price analysis
Meanwhile, Bitcoin bulls are struggling to keep the price above $51,700. At the time of reporting, Bitcoin was valued at $50,986, reflecting daily losses of over 15%. On the weekly timeframe, BTC is down 25%.
Bitcoin seven-day price chart. Source: Finbold
As things stand, investor attention is on the battle between bulls and bears regarding their ability to influence Bitcoin’s price around the $50,000 mark.
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