Renowned economist Peter Schiff recently issued a stark warning regarding the possibility of the U.S. government creating a Bitcoin reserve, predicting dire economic consequences. Schiff's main concern lies in the speculative nature of such a move, suggesting that if the government were to start purchasing Bitcoin, it would have to constantly acquire more to sustain its holdings, potentially driving up prices to unsustainable levels.
Schiff's argument revolves around the notion that a significant government investment in Bitcoin could inadvertently trigger a market crash, as investors may rush to cash out their holdings once prices surge. He further elaborated on the potential domino effect this could have on the economy, pointing out that the government would likely resort to printing more dollars to procure additional Bitcoin, which could lead to hyperinflation and a severe devaluation of the dollar. In Schiff's view, this cycle could ultimately result in the simultaneous demise of both the dollar and Bitcoin, posing a substantial threat to financial stability.