Economist and staunch gold advocate Peter Schiff has issued a stark warning to investors, suggesting that a sharp decline in Bitcoin’s price could lead to mass liquidations of Bitcoin exchange-traded funds (ETFs). In his recent series of posts on X (formerly Twitter), Schiff expressed his concerns about the cryptocurrency market’s trajectory and its potential impact on ETFs.
Bitcoin’s Recent Price Movement
Over the weekend, Bitcoin’s price dropped below $58,000, raising alarms among investors and analysts. Schiff highlighted that if Bitcoin continues to fall past its July low by the opening of the U.S. stock market, Bitcoin ETFs could see a significant drop. He predicted:
“A loss of that magnitude may finally trigger mass ETF liquidations. If so, brace for a Crypto Black Monday.”
Bitcoin ETF Investors’ Commitment
Schiff questioned the commitment of Bitcoin ETF investors, suggesting that many are not long-term holders (HODLers) and have yet to experience significant losses in Bitcoin before. He commented:
“Bitcoin ETF buyers are not long-term HODLers. They have also never experienced losses of this size in Bitcoin. This will be a rude awakening, especially since they were told Bitcoin was a haven, store of value.”
Bitcoin’s Performance Against Gold
As Bitcoin’s price fell below $60,000, Schiff noted that it is now down 19% from its recent high. He further argued that when measured against real gold, Bitcoin has lost 34% since its peak in November 2021. He contended that Bitcoin has been in a major bear market for almost three years, and many HODLers are still unaware of this prolonged downturn.
Ethereum’s Decline
Schiff also shared his outlook on Ethereum, observing that it broke below $2,800 for the first time since February. He pointed out that Ethereum’s price has dropped more than 10% since the new Ethereum ETFs closed on Friday. He speculated that if Ethereum maintains this price until the stock market opens, those ETFs could fall 25% below their July 27th highs.
Conclusion
Peter Schiff’s warnings underscore the volatility and risks associated with Bitcoin and Ethereum investments, particularly for those involved in ETFs. His comments highlight the potential for significant market disruptions and the need for investors to be cautious and prepared for possible downturns. As the cryptocurrency market continues to evolve, investors must stay informed and consider the broader implications of their investment strategies.
