One of the most popular gold supporters and economists in the world, Peter Schiff, has once again attacked Bitcoin, this time stating that its price can never be too low, implying that it can easily go down to $0.
The idea behind Schiff’s hate is that Bitcoin has no ‘intrinsic value’ and it’s not backed by anything.
Of course, the Tweet was heavily criticized as Bitcoin has been outperforming Gold and the rest of the traditional stock market during the current pandemic. Schiff is also heavily criticized for his wild predictions on Gold after he stated the precious metal would reach $5,000 back in 2012 when Gold was worth around $1,700.
Unfortunately for Schiff, Gold never reached that figure and it’s currently trading at basically the same price while Bitcoin has seen a massive explosion in price during the past 10 years.
Is The ‘No Intrinsic Value’ A Good Argument Against Bitcoin?
Peter Schiff is definitely not the only one using this argument against Bitcoin, lots of other economists and analysts have trashed Bitcoin based on it. What does intrinsic value really mean? The idea behind this buzzword is that you can measure a stock or asset using an objective calculation. This calculation is completed using several factors like dividends, capital, business model, and many more.
The argument against Bitcoin is that it basically only has value because it has demand but doesn’t everything have value because it has demand? If a company is selling cars but no one wants to buy them, the business will not work and the company will go bankrupt no matter how much ‘intrinsic value’ their cars have.
It’s also important to note that Bitcoin does have intrinsic value and it’s backed by not only demand but also miners. For the blockchain to work, we need millions of computers (mining rigs) to be calculating extremely complex problems. Bitcoin is in fact backed by tens of millions of computers and mining equipment around the world as well as other costs like electricity, not to mention scarcity and its deflationary features.
Remember, if someone hates Bitcoin so much that he has to tweet hundreds of posts about it, the person is probably gaining something from it. Peter Schiff is a well-known gold supporter, his business is basically gold, and Bitcoin is a direct threat to his business.