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Peter Schiff Argues Most Crypto Companies Are Headed for Bankruptcy | Markets Outlook
00:08:42
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Transcript15 lines
- [00:00]
A
Foreign.
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For debate with cz. Founder of Shift Gold and chief economist for Euro Pacific Asset Management, Peter Schiff joins us now. Peter, nice to see you again.
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B
Oh, nice to be seen.
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A
All right. The last time you and I spoke, you said when you come to crypto conferences, people come up to you all the time and thank you for.
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B
Introducing.
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A
Them to the path of looking for hard assets, and that sometimes leads them to bitcoin. Has that happened here yet?
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B
Well, you know, I haven't really heard people say that. A lot of people have come up to me and just asked their selfies and said, you know, hey, we're. I'm a big fan. I've been following you. But nobody has really mentioned that I'm the reason that they own crypto yet. But I'm sure that's the case. But that was what happened happening to me very frequently in the US When I was at the, the conference in May, and probably because I think a lot more people know about me in the United States because that's where I'm based and that's where, you know, I initially got popular. So I probably had a lot of influence among Americans who found their way to bitcoin. You know, when I first got popular was after the financial crisis hit. So 2009, 2010, 2011, and that's when bitcoin kind of came on the scene, very, you know, underneath the radar. But as people started finding out about it, you know, 2013, 14, 15, you know, 17, a lot of those people were people who had already been reading my stuff and following me. And yeah, that's. They eventually ended up at bitcoin. And had I not opened their eyes to sound money and Austrian economics and this, you know, understanding the Fed and fiat money, they may never have, you know, gotten into bitcoin, or at least not at the time that they did, because that's when, you know, people got in back then, they can sell and make a lot of money. I think the people who are getting in now and who have gotten in over the last few years, very different story. They're just going to lose a lot of money.
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A
Do you walk around the conference and think all of this is nonsense?
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B
Oh, yeah, absolutely. Especially when, you know, when you look at the extra booths and all the tech into it. I mean, I, you know, I went to the conference for the Western Regional Mortgage Bankers in Las Vegas in 2005 and again in 2006, and I thought the same thing that I was, I was walking around and I was like, most of these companies are going to go bankrupt. And of course they did. It was all mortgage finance related subprime companies. But that's where I had, you know, you could see the speech that I gave at, in 2006 and I came there trying to find investors to short the subprime market because we had just set up a fund to short that market and you know, you can watch it on YouTube. And pretty much everything I said that was going to happen happened. And you know, most of those companies that were exhibiting did go out of business and there was a whole financial crisis. I think all of these blockchain companies and, you know, crypto related companies, I don't think, you know, 90 plus percent of them will never make any money and they will go bankrupt. I mean, there's a few that might figure out how to make some money. I don't know what they're worth. I'm not smart enough to figure out, you know, which of the 5 or 10% aren't going to go bankrupt. So I just assume avoid all of them knowing what's, what's going to happen. I think it's, it's mostly hype. The whole industry is built on hype. And a lot of it just comes from the tremendous gains that people who got into crypto years ago have. Now a lot of the gains are on paper because, you know, that's just numbers. But obviously, you know, a lot of money has been taken out.
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But that's only been made possible by the money that's come in over the last few years. In fact, a lot of the people now with a lot of the buying that has been the result of maybe Trump being elected and Trump prioritizing Bitcoin and crypto and trying to steer money in that direction. You've had a lot of Wall street money coming in, the ETFs first and then all these, you know, crypto treasury companies. And that's provided a lot more liquidity. And so a lot of the guys that got in 10, 15 years ago have been selling into that and finally realizing these gains. But their realized gains are going to come at the expense of some huge losses because the money that's coming into crypto now, it's never coming out. It's going into the hands of the sellers. But then the rest of it is just going to evaporate because the prices are going to implode and there's just going to be nothing left because this whole thing is like a giant pyramid Ponzi scheme, you know, chain letter, you know, I mean, this is not New. It's just a new way to pull off an old con, right? This stuff has been going on for centuries. You know, this isn't new. So, Peter, it sounds like you don't really have faith that the digital asset ecosystem will be meaningful in the future compared to the sort of real assets you're wearing on your wrist, on your fingers, the gold, silver, things like that. Well, I think most digital assets are just bs. I mean, they're fake assets. They're not going to have any value. Now, that doesn't mean that there won't be any value added by, you know, blockchain or tokenization. In fact, one of the things I'm going to discuss with which got me here is tokenizing gold and what kind of value that can add to the gold market by representing ownership of gold through a token, which means that it's easier for me or anybody to transfer that ownership to a third party. And so if it's easier to exchange gold, then it's even a better form of money. It makes it more divisible. It makes it more portable, you know, and so especially now, you know, where I may want to transact with somebody on the other side of the world, if I can pay them or they can pay me in gold, but we can do that through token, a blockchain, and it's very quick and very inexpensive, then, you know, there's value there. I mean, it makes gold a more valuable form of money. But the reason that tokenized gold would have value is because there's gold there. I mean, when they say bitcoin is digital gold. No, it's not. It's. It's not digital. It's digital, but it isn't gold. Tokenized gold would be digital gold because it's actually gold. But bitcoin is actually nothing, right? You can't. There's nothing that you can substitute gold for. I mean, bitcoin for gold. Like, if I needed something, if I needed gold, they couldn't say, well, why don't you use bitcoin instead? Bitcoin doesn't have any of the properties that gold has, so it's not a replacement. But. But if I have tokenized gold and I need gold, I can buy the token and then take delivery of the gold, and I can make jewelry out of it, or I can put it in a cell phone, or I could use it in, you know, in medicine or wherever gold is used. I can use the tokenized gold for that.
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A
Now you're going to. We're running out of time here. I just want to say quickly, you're going to continue the conversation with. On stage later. He said on X last night that he was a little nervous. Quickly, before you wrap up, what's your message? Why before?
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B
How is he possibly nervous? First of all, he's got the home court advantage here.
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And look, I mean, CZ has made a ton of money already in crypto, so, I mean, he's got, it's like, you know, you know, I'm not worried about cz and, you know, he's running the biggest crypto casino in the world. Right? You know, this is, you know, this is a desert. Right? You know, I'm in the US And I was just speaking to somebody working here who grew up in Las Vegas. And, you know, Las Vegas has casinos. Finance is probably the world's biggest casino. Right? Everybody is gambling. And he's the house. The house always wins, right? That's, that's when you, when it comes to gambling, you want to be the house. And he doesn't even have to serve drinks, give people free drinks, or he doesn't have to. They just gamble, you know, so it's, it's, it's a good business.
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A
We look forward to hearing the debate later on stage. Thanks for joining us at the desk.
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B
All right, my pleasure. Thank you, Peter.