The Peter Schiff Show Podcast
Episode: The Trump Crypto Bubble Already Burst - Ep 1013
Date: February 26, 2025
Host: Peter Schiff
Episode Overview
In this episode, Peter Schiff delivers his signature, unfiltered analysis of recent turmoil in the financial markets, focusing specifically on the sharp downturn in cryptocurrencies following the surge in optimism around President Trump's “crypto-positive” administration. Schiff dissects the collapse in Bitcoin and other digital assets, critiques the rationale for a potential U.S. Bitcoin strategic reserve, and draws comparisons between gold and crypto performance. He also gives his take on tariffs and trade policy, warning about the risks of protectionism and misunderstandings of economic fundamentals by Trump’s advisors. As always, Schiff weaves in his contrarian views on market psychology, inflation, and the future of U.S. economic policy.
Key Discussion Points & Insights
1. Financial Market Recap: Stagflation and Market Moves
- Treasury Rally and Underlying Concerns
- U.S. Treasuries rallied due to market expectations of further Fed rate cuts (02:00–08:00).
- Schiff remains bearish, arguing bond investors aren't accounting for persistent inflation, and that the rally is driven by pessimism over the U.S. economy—not optimism.
- “The weak economic data is actually inflationary… it's going to mean bigger budget deficits and a weaker dollar which is going to push consumer prices higher.” (07:15)
- Stagflation Reinforced by Data
- Recent stagflation data has intensified: Dallas Fed Manufacturing survey collapsed, and consumer confidence saw the biggest three-year drop.
- Surveyed inflation expectations rose to 6%, while Powell claims expectations are “well anchored at 2%.”
- “Whose expectations is he referring to when the surveys are showing that consumer expectations is three times as high, 6%?” (05:43)
2. The Crypto Meltdown: Bubble Bursting
- Sharp Reversal in Crypto Assets (08:30–30:10)
- Bitcoin officially entered a bear market, falling over 21% from its $109,000 Trump-victory high to below $86,000.
- Schiff notes Ethereum is down 40%, Solana 55%—with meme coins like “Trump Coin” dropping 80%.
- Crypto mining stocks are at multi-year or all-time lows (Hive Blockchain, MARA, CleanSpark, Argo Blockchain, etc).
- “If this is the age of crypto, we have a crypto president…why are these miners getting completely destroyed?” (13:40)
- MicroStrategy’s High-Stakes Bets
- Highlighted Michael Saylor’s latest Bitcoin buy—$2B at an average price of $97,500, already at a 10% loss by episode recording (22:00).
- MicroStrategy’s premium to Bitcoin NAV has collapsed from over 270% to 18%.
- “The real strategy is how to bankrupt your company, because that’s the strategy that Michael Saylor is pursuing.” (18:52)
- Who’s Selling? Contradicting the ‘Hodl’ Narrative
- Despite heavy corporate buying, someone is selling into the rallies.
- Schiff questions where Bitcoin's price would be “had MicroStrategy not just bought another $2 billion worth of it?” (22:48)
- Bitcoin vs. Gold: Changing Correlations
- Gold barely off its all-time highs, holding support at $2900/oz (29:00).
- “Gold is within 2% of its all time record high. Bitcoin is in a bear market, 20% below its record high. What does that tell you?” (28:50)
- Bitcoin priced in gold is now 10% lower than its 2021 high, despite its USD highs being broken.
- Trump Premium and Strategic Reserve Talk Debunked
- Schiff attributes the “Trump bump” in crypto solely to campaign hype around a potential “Bitcoin strategic reserve,” which he calls impossible and hype-driven.
- “It was all just a bunch of hype to get people to buy so the whales could sell. Because there’s some big selling going on...” (25:08)
3. ETF Outflows and Bear Market Dynamics
- Caution over Bitcoin ETFs
- Schiff predicts coming liquidations from ETF investors who “aren’t die-hard Bitcoin maxis” and will rush to exit.
- “When it turns out that they're losing money, I think they're going to take their chips and go to another casino…” (35:44)
- MicroStrategy’s Endgame
- Once MicroStrategy’s stock trades at a discount, it can no longer issue shares to buy more Bitcoin, halting their buying and exposing the market’s fragility.
- “If MicroStrategy ever sold any bitcoin, bitcoin would crash.” (41:41)
- Predicts eventual bankruptcy for MicroStrategy due to leveraged purchases and upcoming mature convertible notes.
4. Gold and Silver: Contrarian Opportunities
- Both gold and silver saw routine market dips, which Schiff repeatedly frames as “buying opportunities.”
- “That’s the dip to buy… these stocks again, I am looking for a ballistic move in the gold stocks. I don’t know, it could start any day.” (45:23)
- Silver below $32 “is buying the bottom” in his view (58:17).
5. Tariffs, Trade, and Economic Misconceptions (1:00:30–1:22:00)
- Critique of Trump Administration Tariff Plans
- Schiff argues that tariffs (e.g., 25% on imported cars) would raise prices for Americans, complicate the car market, and potentially have lasting negative trade consequences.
- Rebuts Peter Navarro’s claim (Trump advisor) that trading partners will “just eat” the tariffs: “That’s complete nonsense. There are a lot of companies...that don’t even have a 25% margin. So if they ate the tariff, they’d be losing money.” (1:06:41)
- Explanation of VAT Taxes—Not Unfair to US Exporters
- Details why Value Added Taxes (VAT) don’t serve as hidden tariffs or export subsidies, dispelling Navarro’s argument.
- “It’s ridiculous to say that not making the German exporter add the tax that’s there to fund government... is an unfair subsidy.” (1:11:25)
- Systemic Economic Weaknesses
- Emphasizes America’s structural imbalances—living off debt, deindustrialization, and underestimating long-term consequences of fiscal and trade policy mistakes.
- “We have really destroyed the underlying industrial base of our country. We have sold off a lot of our assets and gone into hock. We've gone from the world's biggest creditor to the world's biggest debtor. And there is a price to be paid...” (1:19:10)
6. Political Outlook and Budget Realities
- Schiff foresees both Democrats and Republicans mischaracterizing the causes of economic pain.
- Democrats will blame Trump; Trump will try to blame Biden, but the problems are “pre-wrecked.”
- Also slams Republican inaction on deficits, noting their budget will “increase the deficit” and debt ceiling.
- “If they were serious, they wouldn't increase the debt ceiling. There's your opportunity. No more debt. Let's balance the budget…” (1:24:10)
Notable Quotes & Memorable Moments
- On Crypto Mania:
- “When everyone thinks it's a sure thing, the odds are it ain't gonna happen. Right? But 88,000 is a hell of a good price. You know, you're still getting what, 40 ounces of gold or 30 ounces of gold for a bitcoin. That's a lot of real money for fake money.” (52:43)
- On Economic Data:
- “This is not the type of economic weakness that any of the people who are trading today or who are programming algorithms to trade have experienced. You have to go back to the 1970s...” (07:55)
- On MicroStrategy's Fate:
- “At some point, these convertible notes are going to come due and MicroStrategy is going to have to repay the lenders in cash and he doesn't have the money and he just has bitcoin and he'd have to sell it.” (41:49)
- On Tariff Policy:
- “You want to screw up the automobile market, right? Put 25% tariffs on cars.” (1:06:20)
- “If these tariffs go away, then the value of that car is going to plunge, because you could buy a new car without a tariff…” (1:16:59)
- On Political Realities:
- “Trump, in many cases, gets half the story right, but he doesn't get the whole thing right. He knows that the trade deficits are bad… he just doesn't understand what is necessary to do it.” (1:18:10)
Segment Timestamps
| Topic | Timestamp | |--------------------------------------------------------|------------------| | Financial Markets Recap & Stagflation | 00:02 – 08:00 | | Crypto’s Bear Market, MicroStrategy Analysis | 08:30 – 30:10 | | Gold and Silver: Relative Strength and Dip Opportunities | 29:00 – 31:40 | | Coming Crypto ETF Outflows, Bear Market Psychology | 34:30 – 41:45 | | MicroStrategy Endgame and Bankruptcy Scenarios | 39:00 – 43:50 | | Gold & Gold Miners: Dip Buying Advice | 45:23 – 47:19 | | Silver Market Update | 58:17 – 59:00 | | Tariffs, VATs, and Trade Analysis | 1:00:30 – 1:17:50| | US Economic Imbalances & Political Reactions | 1:18:00 – 1:24:35| | Republican Budget, Debt Ceiling, Political Hypocrisy | 1:24:36 – 1:27:00|
Additional Notes
- Schiff briefly shares personal anecdotes about his father's influence and preserves his father's radio show archives for listeners (52:55–56:00).
- Promotes his wife's music, describing her Spotify releases (“Laughing Cats”) (56:10–57:45).
- Strong call for listeners to buy gold, silver, and mining shares as genuine dips unfold and to exercise skepticism about crypto “buy the dip” narratives.
Conclusion
Schiff’s tone is both critical and lively, mixing macroeconomic warnings with sharp skepticism toward cryptocurrencies and Trump’s economic advisors. He challenges mainstream optimism in both crypto and the broader U.S. economy, advocating a defensive, inflation-aware approach centered on precious metals, while providing listeners with clear, timestamped insights and quotable zingers throughout the show. This episode is a must-listen for followers of the intersection between finance, politics, and market psychology.