The Zhitong Finance App learned that Peter Schiff (Peter Schiff), a Wall Street preacher and a well-known precious metals investor, said that Bitcoin was able to maintain its gains, and that gold had taken back its previous gains, which surprised him, but he still expected Bitcoin to fall to a new low.
Bitcoin and gold both rose sharply after the US Treasury announced that it would double the size of long-term bond repurchases to at least $4 billion per operation. Schiff added that before the US Treasury issued the above statement, Bitcoin traded at around $60,000, and is now close to $85,000. In contrast, after the news was announced, gold soared to about 4,700 US dollars, then fell back to about 4,000 US dollars. He said, “I do expect it to hit a new low. I just thought this should have happened.”
Schiff said that Bitcoin is taking advantage of the same upward trend as technology stocks, and this round of the market has already driven most large-cap stocks higher. He said that it is expected that when this round of rising tech stocks subsides, Bitcoin will also fall.
Strategy (MSTR.US), the world's largest Bitcoin holder, sold Bitcoin earlier this year to pay its preferred stock dividend as planned. Up to now, the company has bought back some Stretch Preferred Shares (STRC) and has restarted buying Bitcoin on a small scale. In response, Schiff said that Strategy's operations were “all whitewashed.”
According to Schiff, the midterm elections on November 3 could have an impact on Bitcoin. He claims that the Republican Party has turned Bitcoin into a partisan issue, while the Democratic Party believes that Bitcoin is a source of funding and votes for their political opponents.
“Bitcoin is now a Republican thing,” Schiff said. He predicted that if the Democratic Party takes control of Congress, action will be taken against this industry, and “when it comes to Bitcoin, Washington will be more of an enemy than a friend.” Furthermore, Schiff said he doesn't want the government to support Bitcoin through strategic reserves, and “I want the government to remain neutral.”
Optimistic about the long-term price of gold and silver
Compared to his pessimistic attitude towards Bitcoin, Schiff is still strongly optimistic about precious metals. Schiff pointed out that the market is experiencing a deeper bond bear market. The traditional view is that rising bond yields will weaken the appeal of gold as an unyielding asset, but Schiff believes that the market misunderstood the logic.
Schiff said, “This is the best thing for gold and silver because rising bond yields mean bond prices are falling. Bond investors are losing money and must sell bonds if they want to stop losing money. So what would they buy their money for? Gold or silver.”
Schiff attributed the recent decline in gold to trading algorithms automatically selling gold when interest rates rise, and called it “garbage in, garbage out.” He also mentioned that interest rates and gold rose at the same time in the 1970s. The key was not whether interest rates rose, but whether interest rates could outperform inflation. He said, “What if interest rates rise to 20%, but inflation is 30%?” “I'd rather hold gold without any gain or suffer a 30% loss.”
Schiff believes that central banks around the world are not deterred by fluctuations in gold prices. According to data from the World Gold Council, the world's central banks made a net purchase of 39 tons of gold in August; the Central Bank of China increased its gold holdings by about 23 tons in September, the 23rd consecutive month of purchases. Meanwhile, the Bank of Russia has sold 56 tons of gold this year. Schiff said that this just shows that gold can be used as a reserve asset during the war. “It is a kind of reserve that you can actually use.” He anticipates that eventually sellers will gradually run out and that gold will become “the last safe haven that still stands.”
Participants at the London Gold Market Annual Conference last week predicted that the price of gold could be close to 5,000 US dollars in a year. Schiff, on the other hand, believes that the price of gold may even reach this level sooner. He also mentioned that if a crisis similar to the collapse of Silicon Valley Bank and Signature Bank in 2023 occurs in the future, it may be a catalyst for the next round of upward movement in gold prices, because the Federal Reserve usually stops austerity after “something breaks down.”
On the silver side, Schiff claims that the price of silver has stabilized at around $60 per ounce, which is significantly higher than the “double top” area of 50 US dollars, which failed to break through in 1980 and 2011. He believes that $125 per ounce is not the current high, but only an “initial breakthrough”, and there will be more room for growth in the next round.