Bitcoin Buyers are ‘Dumb, Inexperienced Kids’: Gold Investor Slams Crypto

May 14, 2019 09:30 UTC

By CCN: Gold investor Peter Schiff unleashed yet another savage takedown of bitcoin at this weekend’s SALT Conference.

Schiff touted the same usual criticisms of bitcoin, calling it a “pump and dump scheme” that has “no value to hold.” But in a particularly aggressive statement, he managed to criticize an entire generation:

“A bunch of young inexperienced kids are going to be dumb enough to buy bitcoin. Maybe they will. But as they get older they’re going to learn better.”

When it was pointed out that half the audience owned bitcoin, he doubled down, comparing bitcoin to gambling:

“I doubt they have a substantial amount of it. Maybe they bought it like they would go into a casino and buy some chips.”

A poll of 2,213 conducted on Twitter after the debate confirmed that 91 percent of millennials would buy bitcoin over gold.

A generational shift to bitcoin

On the other side of the debate was bitcoin investor and founder of Digital Currency Group Barry Silbert. Silbert challenged Schiff’s outdated perspective on gold, claiming a huge generational shift will move money into bitcoin.

“There is a generational shift in investor mindset that is happening. Over the next 25 years $68 trillion of wealth is going to be handed down from boomers to Gen X, Gen Y, and Millennials. And I can assure you that the younger generation of investors don’t view gold the same way as our parents and grandparents did… So as the $68 trillion gets handed down, it is not going to stay in gold.”

Silbert’s Grayscale Investment fund, which managed $1.8 billion in crypto, recently launched a #DropGold campaign. It urges institutional investors to embrace digital assets over gold.

Schiff: “Almost everything will outperform bitcoin”

Schiff used the debate to rant about cryptocurrencies and swoon over gold. He adamantly claimed that “gold is money,” while slamming bitcoin: “There is no way it can even function as money.”

Silbert hit back:

“Equating gold to money is ridiculous… Nowadays money is digital. You can’t walk into Starbucks with your chunk of shiny metal and buy a cup of coffee.”

The timing is particularly fortunate for Silbert as news broke yesterday that Starbucks will soon accept bitcoin payments via payment startup Flexa.

Schiff maintains that, over the long-term, almost every other asset class will beat bitcoin:

“The air is coming out of this bubble. The peak of the market was at $20,000… Now we’re in a bear market and in a bear market you always have rallies. You have these false rallies, we’re having one now… Pretty soon it’s mostly going to be stories about people who lost their life savings because they put real money instead of play money into bitcoin.”

A “fool’s gold” Ponzi scheme

Schiff has been on something of a bitcoin-bashing world tour lately. He also appeared on RT’s Keiser Report last week to slam bitcoin as “fool’s gold.”

“I don’t think bitcoin has anything in common with gold. I mean it tries to pretend to be gold, but I think it’s fool’s gold.”

As institutional money continues to pour into bitcoin at record pace, it looks like goldbug Peter Schiff may be on the wrong of history on this one.

Last modified: May 14, 2019 08:37 UTC

Ben is a journalist with a decade of experience covering financial markets. Based in London, UK, his writing has appeared in The Huffington Post and he was Chief Editor at Block Explorer, the world's longest-running source of Blockchain data. Reach him at benjamin-brown.uk or on Twitter at _Ben_Brown. Email ben @ benjamin-brown.uk.