Economist Peter Schiff Explains How Bitcoin Could Tank 85% Against Gold

Peter Schiff, renowned Bitcoin skeptic and chief economist, recently tweeted his concerns over the state of the financial market and its potential effects on Bitcoin. According to Schiff, with the NASDAQ currently down 12%, the possibility of a full-blown bear market could send Bitcoin into a steep decline. He claimed that a 12% drop in the NASDAQ would correlate with a 24% drop in Bitcoin. If this trend continues, Schiff predicts that Bitcoin could fall to around $65,000 should the NASDAQ decline by 20%. Notably, Bitcoin is trading at $83,000, down 23.5% from its all-time high. Meanwhile, Schiff believes a $65K dip could be a joke compared to where he really expects Bitcoin to crash. He cited past bear market data to warn of an even steeper price crash for Bitcoin. Specifically, he pointed to the Dot-com bubble burst, the 2008 Global Financial Crisis (GFC), and the COVID crash of 2020, during which the NASDAQ experienced declines of up to 80%, 55%, and 30%, respectively. Schiff suggests that Bitcoin could be in serious trouble if this bear market follows a similar trajectory. His worst-case scenario is for Bitcoin to crash to $20,000 or lower. Gold's Positive Correlation with NASDAQ Decline While Schiff is bearish on Bitcoin, he is expectedly more optimistic about gold. He highlights a negative correlation between the NASDAQ and gold. Schiff cited that gold prices have increased by 13% since the NASDAQ's peak in December 2023. This trend suggests that gold may continue to rise as the NASDAQ falters. If the NASDAQ undergoes a 40% drop, Schiff predicts that gold could surge above $3,800 per ounce. Moreover, Schiff speculates that if a bear market in stocks coincides with a decline in the U.S. dollar on the foreign exchange market, gold could see a more substantial rally. In his view, this would contrast with Bitcoin’s likely downfall, confirming his belief that gold will remain a more stable store of value during periods of market volatility. Bitcoin Decline Could End Its Store of Value Appeal Schiff argues that even if Bitcoin were to stabilize at around $20,000 and gold reached $3,800, Bitcoin would still be down more than 85% in comparison to gold. He believes this sharp divergence would undermine Bitcoin’s reputation as a store of value akin to gold. In his view, this would prompt governments and institutional investors to abandon Bitcoin altogether. Schiff predicts that the U.S. government, along with other state entities, would no longer feel the need to hold Bitcoin in their strategic reserves. In parallel, exchange-traded fund (ETF) investors might start selling their Bitcoin positions, further driving the market down. Schiff projects that the selling pressure could be so intense that companies like Strategy (MSTR) , which hold substantial Bitcoin reserves, could face bankruptcy if they fail to sell enough of their holdings. While Bitcoin continues to face volatility, Schiff's bearish outlook aligns with his long-standing skepticism of BTC. Meanwhile, the crypto market has historically defied these pessimistic predictions.