FameEX Hot Topics | Peter Schiff States Bitcoin Enters Bear Market Amid US Stagflation Issues

Economist and prominent gold advocate Peter Schiff recently declared bitcoin to be in a bear market, signaling a downturn despite the increasing traction of spot Bitcoin exchange-traded funds (ETFs). In a series of posts on the social media platform X, Schiff also highlighted that stagflation is currently a reality in the U.S. economy, not just a potential future issue.

This Wednesday, Schiff noted the falling price of bitcoin, which dipped below $57,000, in spite of substantial capital inflows into bitcoin ETFs in recent months. He emphasized, “Despite all the hype around the bitcoin ETFs, bitcoin is clearly in a bear market.” He further illustrated the decline by pointing out that bitcoin’s value has dropped 23% in dollar terms, now valued at less than 25 ounces of gold. His blunt message to cryptocurrency enthusiasts was: "Turn out the lights HODLers, the party is over."

Schiff has long been critical of bitcoin, particularly highlighting its volatility during downturns. Earlier last month, amid a surge in gold prices, he announced the end of what he called the bitcoin “fad,” labeling it a substantial bubble. This period also marked significant outflows from U.S. spot bitcoin ETFs, which experienced withdrawals for five straight days, amounting to $635 million.

Furthermore, Schiff has expressed serious concerns about wider economic issues in the U.S. Reflecting on the latest economic data, he stated, "Today’s economic data is conclusive evidence that stagflation is not just a future possibility, but already a current reality." He referenced the April Institute for Supply Management (ISM) index, which indicated a steep decline as orders decreased sharply and prices paid increased dramatically. Additionally, job openings in April fell to their lowest level in three years.

Earlier in the month, Schiff warned that inflation was resurging "with a vengeance" and emphasized the necessity for "significant" interest rate hikes to mitigate its effects. He also critiqued JPMorgan Chase CEO Jamie Dimon for underestimating the impending economic difficulties. In a more recent commentary, Schiff foresaw challenging times ahead for the Federal Reserve, remarking, "It’s game over for the Fed ... Despite forecasts of Fed rate cuts, long-term interest rates continue to rise." He argues that these climbing long-term interest rates will exacerbate inflation, which, although detrimental for bonds, is likely favorable for gold, thus supporting his long-standing endorsement of the precious metal.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.