Bitcoin’s price has recently hit a new record high of $4,500 per token.
However, the continuous phenomenal performance of Bitcoin has also reinforced Schiff’s belief that the digital currency is advancing farther into bubble territory.
In early 2017, Schiff also referred to Bitcoin as “digital fool’s gold” and compared the virtual currency to the infamous bubble involving the toy brand Beanie Babies.
In a recent interview with CNBC, Schiff claimed that the bullishness of Bitcoin and other digital currencies is a sign of an impending bubble:
“There’s certainly a lot of bullishness about Bitcoin and cryptocurrency, and that’s the case with bubbles in general. The psychology of bubbles fuels it. You just become more convinced that it’s going to work. And the higher the price goes, the more convinced you become that you’re right. But it’s not going up because it’s going to work. It’s going up because of speculation.”
Schiff, who correctly predicted the mortgage crisis in 2008, said that his bearish outlook on cryptocurrencies is based on the fact that they are neither money nor commodities.
He acknowledged, however, that the solid performance of digital currencies can offer good trading opportunities for investors who are not committed to the long-term feasibility of the asset class.
He also asked an interesting question about the feasibility of Bitcoin and other digital currencies in the long term:
“Even if you believe that cryptocurrency is going to work, how do you know that 10 years from now Bitcoin is going to be the one? If digital currencies can work, someone can come up with another one. And another one. And another. And another. There’s nothing special about Bitcoin that another cryptocurrency can’t replicate and improve on. Right now, Bitcoin is just the most popular because it was first.”