Gold Wins, Bitcoin Loses: Peter Schiff Explains Central Banks' Choice

In his recent X post, Peter Schiff doubled down on gold as the ultimate safe-haven asset. By: Update

Peter Schiff, a known Bitcoin critic, continues to spark discussion on the never-ending gold vs BTC debate with his recent post on X, discussing the two assets. His argument focused on the growing trend of global central banks favoring gold reserves over Bitcoin.

If gold is the past and Bitcoin is the future, why are foreign central banks that are preparing for a future where the U.S. dollar is no longer the reserve currency, replacing their dollar reserves with gold and not Bitcoin?

If gold is the past and #Bitcoin is the future, why are foreign central banks that are preparing for a future where the U.S. dollar is no longer the reserve currency, replacing their dollar reserves with gold and not Bitcoin?

— Peter Schiff (@Schiff_Inc) August 24, 2024According to Peter Schiff, the apex legal and monetary framework focused on rendering the U.S. dollar the reserve currency is crumbling. He highlighted that foreign central banks are preparing for a world without the dollar, which is evident in their actions.

Moreover, Peter Schiff highlighted that the American people may be setting themselves up for quite a bit of pain with their enthusiasm for collecting large quantities of Bitcoin at high prices.

He claims that Americans, who own nearly half of the global Bitcoin and hold 40% of the total supply, might face significant losses as others cash out.

In a surprising turn of events, CERN scientists experimented with a lead-to-gold transformation. This sparked debate about the metal’s long-term value, with CNBC’s Ran Neuner predicting Bitcoin will outperform gold as a safe-haven asset.

However, Peter Schiff remains skeptical of Bitcoin’s capabilities. He questioned why central banks wouldn’t opt for BTC if it’s truly the superior reserve asset.

According to a report by BNN Bloomberg, Donald Trump’s tariff policies and the Dollar’s devaluation have led to global central banks diversifying their reserves with gold.

Furthermore, Russia’s 2022 invasion of Ukraine is another major factor contributing to the growing demand for the asset. According to a Reuters report, “This year’s demand from central banks [for gold] may be the highest in many decades.”

Following Russia’s Ukrainian invasion, central banks accelerated their gold purchases, buying over 1,000 metric tons annually – double the previous decade’s average. BofA commodity strategist Michael Widmer stated, “Emerging market central banks currently hold around 10% of their assets in gold. They should really hold 30% of their assets in gold.”

It is pertinent to note that Russia’s central bank is a top gold holder globally. The country has stockpiled the metal from 2014 to 2020 to shield against Western sanctions. Meanwhile, the Ministry of Finance is believed to be quietly accumulating this asset from domestic producers.

This action showcases the broader trend of foreign governments diversifying their reserves with the precious metal.