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Peter Schiff: Bitcoin bubble keeps inflating

Peter Schiff: Bitcoin bubble keeps inflating

Head of Euro Pacific Capital called foolish people's attempts to save their savings by investing in Bitcoin.

Cryptocurrencies cannot be used to hedge against inflation, says Peter Schiff, CEO of Euro Pacific Capital. Debating with Australian economist Steve Keen, Schiff compared digital assets to fiat currencies.

The crypto skeptic stated, "Fiat currencies and cryptocurrencies have no real value. They have the same weakness - people's trust backs them. That's why it's foolish to try to save your savings during a crisis by investing in Bitcoin."

He didn't exclude that one day the Bitcoin value will overcome the historic high of $69,000, which was set in November last year. However, according to Schiff, cryptocurrency is just a financial bubble.

"I don't know how big this bubble is going to get before it bursts. But I'm smart enough to see the bubble when it inflates," Schiff pointed out.

Last September, the economist predicted the collapse of altcoins once the cryptocurrency bubble burst. Also in 2020, he claimed that bitcoin will never be able to exceed the $20,000 mark and called the cryptocurrency a "sinking ship."

Peter Schiff is one of the most famous critics of the first cryptocurrency. In 2011, when BTC was worth about $1, he said he would have preferred to invest $10,000 in gold instead of bitcoin since it was unknown what would happen to it in a few years. Since then, the first cryptocurrency has risen by 4.4 million percent. 

Bitcoin (BTC)

Bitcoin is the oldest cryptocurrency on the market. Almost 13 years ago, the unknown mysterious creator Satoshi Nakamoto (nobody knows who hides under this pseudonym yet) released a bitcoin whitepaper, a newsletter describing the project. The first transaction blocks appeared in the namesake blockchain. Bitcoin was intended as an alternative to fiat currencies, digital money that exists independently of intermediaries such as banks and governments. 

Bitcoin transactions are recorded in a decentralized distributed registry and are protected from outside modification thanks to blockchain technology and complete decentralization. The issuance is strictly limited to 21 million coins. The concept of inflation does not apply to Bitcoin. On the contrary, every year the bitcoin supply in the market will decrease, which means that the rate of this cryptocurrency will only grow. Earlier we reported that at the end of 2021, 90% of all bitcoins have been already mined. Bitcoin is mined ("extracted") according to the PoW (Proof-Of-Work) algorithm and requires a lot of electricity and computing power. That is why Bitcoin is often called "digital gold". 

Market dominance: 40%. 

Capitalization: $830 billion, at the highs exceeded $1 trillion. 

Advantages: has the greatest value and capitalization, limited issuance.

Disadvantages: energy-consuming mining, expensive mining equipment, high network fees, and slow transactions.                  

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