Peter Schiff Predicts Deeper Losses for Spot Bitcoin ETFs
Economist Peter Schiff, a well-known critic of cryptocurrency, has expressed his belief that spot bitcoin exchange-traded funds (ETFs) will suffer even greater losses. He shared his perspective on social media this week.
Bitcoin Price Drops Following ETF Approval
Bitcoin experienced a drop in price after the approval of the spot bitcoin ETFs by the SEC. It fell below $40K on Monday and continued to decline on Tuesday, reaching below $39K. Schiff commented on the situation:
All the spot bitcoin ETFs are now in bear markets, defined as a drop of 20% or more from the peak.
Poor Performance of Spot Bitcoin ETFs
Schiff pointed out that the Fidelity Wise Origin Bitcoin Fund (FBTC) had the largest loss at 32%. He also mentioned that the Proshares Bitcoin Strategy ETF (BITO), which tracks bitcoin futures, has seen a decline of over 50% since its launch in 2021. Schiff believes that anyone who invested in any of the 11 spot bitcoin ETFs will experience even worse results.
Spot ETFs Shifting Demand, Not Creating New Demand
According to Schiff, the new bitcoin ETFs are not generating additional demand. Instead, they are redirecting existing demand from other bitcoin-related assets such as Microstrategy stock (MSTR) and Grayscale’s bitcoin trust (GBTC). He compared this to rearranging deck chairs on a sinking ship.
COIN Stock and the Impact of ETFs
Schiff noted that COIN stock (Coinbase) is one of the biggest losers due to the introduction of bitcoin ETFs. While Coinbase holds bitcoin in its custodial services for these ETFs, traders and investors who previously used Coinbase for bitcoin trading are now opting for the ETFs instead. Additionally, those who saw COIN as a proxy for bitcoin are now investing in the ETFs. JPMorgan has also downgraded COIN stock, further contributing to its decline.
Schiff’s Earlier Warnings
Prior to the approval of spot bitcoin ETFs, Schiff had warned that they would result in a sell-off by speculators and minimal institutional demand. He also predicts that the chairman of the SEC, Gary Gensler, will introduce stringent regulations for cryptocurrencies, causing a further decrease in bitcoin’s price.
Hot Take: Spot Bitcoin ETFs Face Bleak Future, According to Peter Schiff
Economist Peter Schiff has expressed his pessimistic outlook for spot bitcoin exchange-traded funds (ETFs), predicting significant losses. Despite the anticipation surrounding the approval of these ETFs, the price of bitcoin dropped following their launch. Schiff believes that the spot ETFs are not generating new demand but are merely redirecting existing demand from other bitcoin-related assets. This has led to poor performance for the ETFs and negative consequences for stocks like Coinbase. Schiff’s warnings prior to the approval of the ETFs have proven to be accurate, further affirming his predictions about the future of spot bitcoin ETFs.
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