Bitcoin crash warning! Renowned economist: 1 trillion dollar crypto market will face bankruptcy and layoffs.

Economist and gold advocate Peter Schiff issued a stern warning about the impending collapse of the Bitcoin and Crypto Assets market, pointing out that the surge in gold prices has exposed the weaknesses of cryptocurrencies as a reliable investment option, stating, “Gold is the biggest threat to Bitcoin.” He advised Crypto Assets holders to “take advantage of the current opportunity to quickly sell your foolish gold for cryptocurrencies and buy real gold and silver.”

Shiff's Bitcoin Crash Four Major Warnings

(Source: Trading View)

Recently, Schiff has issued a series of warnings about the Bitcoin crash on social media, basing his arguments on a direct comparison between gold and Crypto Assets. As investors turn to physical gold bars, the claim that Bitcoin is “digital gold” has been debunked. Schiff believes that this shift in investment focus is not a short-term fluctuation, but the beginning of a structural trend.

Shiff attributes the shift in investment focus to the reputation of gold as a safe haven against inflation and economic instability. On October 16, he stated, “Gold is more likely to reach $1 million than Bitcoin,” highlighting the differences between the two assets. The core logic of this argument is that gold has thousands of years of historical validation, whereas Bitcoin has only existed for 16 years and has not yet been truly tested in a global financial crisis.

Sheff's Primary Warning:

The crash of Bitcoin and Ethereum is threatening: If the two major mainstream coins lose key support, it will trigger panic selling.

The altcoin market may collapse: A drop in Bitcoin usually leads to a 2-3 times larger drop in altcoins.

Crypto Assets investors face systemic failure risks: Large-scale bankruptcies and defaults will trigger a chain reaction.

Gold as a Hedge Tool Surpasses Bitcoin: The hedging value of physical assets is more reliable during economic crises.

This economist also criticized the hype surrounding Bitcoin, pointing out that market enthusiasm has reached a boiling point. He advised crypto assets holders: “'Hoarders'—while you can still buy, quickly sell your 'crypto fool's gold' and buy real gold and silver—otherwise, you will eventually go bankrupt.” Schiff stated that although the Bitcoin market may currently be in a bear market, the bear market is far from over, and there are no signs of relief.

The Surge in Gold Exposes the Myth of Digital Gold

The core of Schiff's argument lies in the actual performance of gold prices. Recently, gold prices have repeatedly reached new highs, approaching the historic peak of 3700 USD per ounce, while Bitcoin has been fluctuating around 100,000 USD, failing to break through the historical high and continue rising. This comparison provides empirical support for Schiff's “Bitcoin crash” narrative.

From a traditional finance perspective, gold's performance indeed aligns more closely with the characteristics of a safe-haven asset. During times of geopolitical tension, rising inflationary pressures, or increased economic uncertainty, gold often tends to rise steadily, whereas Bitcoin's volatility makes it difficult to assume this role. Schiff pointed out that this difference has been particularly evident in recent months, as global markets have shaken due to tariff negotiations and inflation concerns, with gold continuing to strengthen while Bitcoin has experienced dramatic fluctuations.

Key Points for Investors:

Gold provides substantial inflation protection: Physical assets have a stronger ability to retain value when fiat currency depreciates.

The volatility of Crypto Assets creates systemic risks: The drastic price fluctuations make it difficult to serve as a stable store of value.

Do not hold too much hope for a short-term recovery in Bitcoin: Both technical and funding aspects indicate that upward momentum is weakening.

Shiff's viewpoint has gained some support in the traditional finance sector. Many traditional asset managers believe that the intrinsic value of crypto assets is difficult to assess, while gold has industrial uses and a monetary history spanning thousands of years. However, this perspective overlooks a key fact: gold and Bitcoin are not entirely competitive; they may serve different investment needs and risk preferences.

Strong Counterattack from Crypto Assets Supporters

However, despite Schiff's harsh warnings, cryptocurrency supporters countered that he missed the point. They stated that Bitcoin has several fundamental advantages over traditional safe-haven assets, including a fixed supply, decentralization, and portability. These features offer advantages in the digital age that gold cannot compare to.

The supply limit of 21 million Bitcoins is written into the code and cannot be changed by any government or institution. In contrast, although the Earth's reserves of gold are limited, new extraction technologies and future possibilities such as asteroid mining mean that supply is not absolutely fixed. Additionally, the divisibility of Bitcoin (which can be divided up to 8 decimal places) and its portability (which can be transferred across borders through mnemonic phrases) are difficult for physical gold to match.

Some have pointed out that the rise in gold does not undermine Bitcoin's potential long-term value as a hedge against the depreciation of fiat currency. They also note that historical patterns suggest that market downturns often precede significant rallies. After Bitcoin fell to 3,000 USD in 2018, it broke through 69,000 USD in 2021. After dropping to 15,000 USD in 2022, it reached a new high of 126,000 USD in 2024. This cyclical pattern indicates that short-term fluctuations should not be viewed as long-term trends.

The Argument of Crypto Elasticity:

The limited supply of Bitcoin means long-term demand support: Scarcity will drive value up over time.

Decentralization allows digital assets to be free from any government constraints: providing a true escape route when monetary policy is out of control.

Market corrections typically occur before a real growth cycle begins: Historical data shows that there is a stronger rebound after every bear market.

Crypto Assets supporters also point out Schiff's long-term bias. Schiff has maintained a critical stance since the birth of Bitcoin, repeatedly predicting its collapse, yet Bitcoin has risen from almost zero value in 2009 to over 100,000 dollars today. This consistent bearish position has rendered his warnings unconvincing within the Crypto Assets community.

Key Moment for Traditional Assets and Digital Assets

At the same time, Schiff's warning highlights the growing tension between traditional investment options and new digital assets—this will be a critical moment for investors trying to navigate increasingly turbulent financial conditions. The essence of this debate is not only about the merits of gold versus Bitcoin, but also about the fundamental assumptions of the future financial system.

The argument in favor of gold is based on history and stability, while the argument for Bitcoin is based on technological innovation and paradigm shifts. The real question investors face is not “gold or Bitcoin,” but rather “how to balance traditional and emerging assets in their portfolio.” Over-concentration in any asset class can pose risks, whether it's the risk of a Bitcoin crash or the opportunity cost of missing out on the digital revolution.

Objectively speaking, Schiff's warning reminds investors not to blindly chase any assets, including Crypto Assets. However, viewing it as an inevitable prophecy of Bitcoin's collapse is also too extreme. The market always oscillates between fear and greed, and true wisdom lies in understanding one's risk tolerance and making decisions based on fundamentals rather than emotions.