Economist Peter Schiff weighed in on Monday on why Bitcoin (CRYPTO: BTC) would never replace the dollar as the global reserve currency, despite the declining purchasing power of the greenback.
Bitcoin’s Value Depends On ‘Greater Fool’ Theory
Appearing on the Tucker Carlson show, Schiff said that the apex cryptocurrency lacks any appeal beyond what he often describes as the “greater fool” theory, a concept where people buy assets, not based on their intrinsic value, but with the expectation they can sell them for a higher price to a “greater fool” later.
“Central banks can’t hold Bitcoin as reserves against their own currency. If they had to sell it, the price would drop sharply,” the Bitcoin critic argued. “You have to have real money.”
The Paradox Of Fiat: Bitcoin Vs. Dollar
Schiff acknowledged that both Bitcoin and the dollar operate on “fiat” principles, meaning that, unlike gold, they are not backed by a tangible commodity and have no intrinsic value.
So why not Bitcoin?
“Most people who are buying Bitcoin are buying it to get more dollars,” Schiff stated. “Most people are not getting into Bitcoin because they just want a safe store of value.”
He added that people only want Bitcoin’s price to go up so that they can cash out and “have more dollars than they started with.”
Bitcoin and the dollar took a beating in 2025, while gold surged more than 60% to emerge as a reliable safe-haven asset. Over a longer timeframe, however, Bitcoin has netted much better returns.
| Entity | 2025 Gains +/- | 5-Year Gains +/- | 10-Year Gains +/- |
|---|---|---|---|
| Bitcoin | -7.31% | +162% | +23,416% |
| Spot Gold |
+63.65% | +175% | +354% |
| U.S. Dollar Index | -10.23% | +7% | -2.6% |
Is BTC Heading For A Big Crash?
Schiff, known for his bearish Bitcoin predictions, said last week that investors had ample time to price in a bullish breakout, and the continued underperformance increases the risk of a major crash rather than a smooth rally to new highs.
Earlier, he predicted that an impending dollar crisis would crush Bitcoin’s value, while promoting precious metals such as gold and silver as reliable investments.
Price Action: At the time of writing, BTC was exchanging hands at $88,665.68, up 1.38% in the last 24 hours, according to data from Benzinga Pro.
Photo: Memory Stockphoto / Shutterstock
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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