- Bitcoin dropped below $77K, falling 30% from its January high, fueling renewed skepticism.
- Peter Schiff argues Bitcoin’s volatility makes it unsuitable as a U.S. strategic reserve asset.
- Schiff questions the future of the U.S. Bitcoin reserve if a new president decides to sell.
Bitcoin’s recent drop below $77,000 has reignited debates about its role in government reserves. Economist Peter Schiff argues that Bitcoin’s volatility makes it an unsuitable reserve asset. He noted that Bitcoin has lost 30% of its value since January. Schiff warned that if Bitcoin drops by 50%, the case for holding it as a reserve would be even weaker.
Bitcoin supporters quickly responded to Schiff’s post. Investment manager Michael A. Gayed replied with the phrase “Store of value.” Many Bitcoin advocates argue that the cryptocurrency remains a strong long-term asset despite short-term price fluctuations. Schiff dismissed this argument, questioning,
What value does Bitcoin have to store? If the price can drop over 30% in less than two months without anything really happening, how can that be a store of anything? What if the government held Bitcoin in reserve and needed to sell it?
In a separate post, Schiff questioned why the U.S. government should hold an asset that can lose value so quickly. He suggested that future administrations might not maintain the Bitcoin strategic reserve or crypto stockpile. Both were created through a presidential executive order rather than congressional approval. He asked what would happen if a new president decided to sell the entire stockpile.
Schiff has consistently criticized the government’s decision to establish a Bitcoin strategic reserve. He previously claimed this move could harm the U.S. dollar. He also labeled Bitcoin investments as a waste of resources. He believes they divert capital from real wealth creation as the market experiences losses.
On Monday, the crypto market saw extended losses with Bitcoin falling below $77,000, hitting a four-month low. This decline followed the White House crypto summit, where President Donald Trump’s executive order on the Bitcoin Strategic Reserve did not include immediate Bitcoin purchases by the government.
Related: Is Bitcoin Losing to Gold? BTC at Risk of Falling to $70K
At the time of writing, Bitcoin was trading at approximately $79,930. This marked a 3.17% drop over the past 24 hours, according to CoinMarketCap. Market analysts continue to watch Bitcoin’s price movements closely. Some believe the asset will regain its value yet others support Schiff’s position regarding its market stability.
Bitcoin’s volatility remains a key point in the ongoing debate. Advocates highlight its potential for long-term gains. Critics, like Schiff, point to its sharp price swings as a major risk. As global financial markets evolve, the role of Bitcoin in government reserves remains uncertain.
