- Trump suggests using Bitcoin and crypto checks in a FOX Business interview to address U.S. fiscal challenges.
- Schiff argues Trump’s Bitcoin proposal aims to attract political support from cryptocurrency enthusiasts, not solve debt issues.
Financial commentator Peter Schiff has criticized a proposal by Donald Trump, which suggests that Bitcoin could be used to repay the $35 trillion U.S. national debt. This criticism emerged after Trump, a candidate for the Republican Party, proposed incorporating the cryptocurrency as a tool to manage the country’s financial obligations.
This weekend’s #Bitcoin crash is an example of why Bitcoin will never be a reserve asset for any major government or central bank. A reserve asset must have relatively low volatility. It needs to be readily sold when needed. It can’t crash more than assets it’s supposed to hedge.
— Peter Schiff (@PeterSchiff) August 5, 2024
The United States faces a national debt of approximately $35 trillion, prompting politicians and the public to explore various solutions. Among these proposals, Donald Trump and Senator Cynthia Lummis of Wyoming support the idea of purchasing Bitcoin.
They propose that holding the cryptocurrency for an extended period could help reduce the national debt. Trump discussed this idea during a FOX Business interview, where he suggested that Bitcoin and crypto checks could offset the U.S. debt.
Six days ago, the #NationalDebt hit $35T. Since then, it’s risen by $130B. It took the nation 154 years and WWII to add the first $130B in debt. #Biden is on pace to shatter Obama’s record as the biggest deficit spender. However, Obama took 8 years. Biden will do it in just 4.
— Peter Schiff (@PeterSchiff) August 4, 2024
Senator Lummis has furthered this concept by introducing a Bitcoin reserve bill, supported by 2,200 advocacy letters sent to U.S. senators. This legislative move indicates a shift toward considering digital assets in governmental financial strategies.
Schiff, who frequently critiques Bitcoin, argues that Trump’s suggestion aims primarily at garnering support from the Bitcoin community for political gain. He claims that the strategy is intended to attract donations and votes from cryptocurrency enthusiasts rather than offering a viable solution to the national debt.
Additionally, Schiff points out a contradiction in the proposal. Proponents of the strategy believe that Bitcoin’s value could dramatically increase over the next two decades, potentially reaching millions of dollars per coin.
As I warned #Bitcoin has taken out the March low. It’s now trading $51K. That’s a 20% decline from where it was trading when the #BitcoinETFs closed on Friday. So this is a #Crypto Black Monday. Look out below! https://t.co/CK1rHutgly
— Peter Schiff (@PeterSchiff) August 5, 2024
They argue that if the government invests in Bitcoin now and sells it later, it could substantially reduce or even eliminate the national debt and also help control inflation. However, Schiff challenges this view, noting the inconsistency of expecting Bitcoin to appreciate due to inflation while using it to fight inflation.
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