According to Euro Pacific Capital CEO Peter Schiff, the current plunge in the crypto industry signals a “crypto extinction.” He argued that calling the situation a crypto winter implied that there would be a spring.
Schiff insisted that crypto prices, including Bitcoin, would not bounce back after the strong rally in 2021. However, he added that the blockchain ecosystem would “live on.” Schiff said that people would turn to gold, and the asset would win over novel kinds of asset-backed tokens.
With #Bitcoin so far below the $100K target, I think its about time that the rest of you #HODLers follow @tombrady and remove the laser beams from your eyes on your #Twitter profiles? Tom Brady would't be the GOAT if he didn't learn from his mistake.
— Peter Schiff (@PeterSchiff) November 14, 2022
The renowned stock broker will deliver a keynote speech at the Dubai Precious Metals Conference (DPMC) next week. According to the DPMC schedule, Schiff is set to bring up the “end of dollar hegemony, the demise of bitcoin, and the global remonetisation of gold.”
He discussed a keynote speech by Microstrategy CEO Michael Saylor at the same event last year.
“He told the audience to sell all their gold and buy bitcoin,” Schiff wrote on Twitter. “On the day he spoke Bitcoin traded above $60K, while gold was trading near $1,850. Since then gold is down 4% and Bitcoin is down 73%.”
Schiff pointed out that the crypto market was the first to break under the pressures of the Federal Reserve’s monetary tightening cycle. He explained that digital tokens were the “weakest link in the risk chain, having the most leverage and least real value.”
Crypto may have been the first thing that broke during this tightening cycle, but it won't be the last. #Crypto was just the weakest link in the risk chain, having the most leverage and least real value. With a broken link the rest of the chain is weaker and more likely to fail.
— Peter Schiff (@PeterSchiff) November 14, 2022
He also expressed disagreement over Shark Tank host Kevin O’Leary’s demand for immediate crypto regulation, arguing that authority control was “not a solution.” He talked about the high-profile case of FTX, which received scrutiny from both the crypto community and authorities in several regions.
“The lesson of FTX is for investors to do better due diligence and not just foolishly jump on speculative [bandwagons],” Schiff said. “Also, we need sound money with interest rates set by free markets, not central banks.”
Calls crypto regulation
Numerous government officials voiced concerns about the plunge in the crypto industry following FTX’s Chapter 11 filing. They said the case proved the necessity to create a regulatory framework around the crypto industry.
House Financial Services Committee chief Maxine Waters said that if there had been a well-maintained federal regulation, crypto investors would not have sustained their current losses.
AAX updated: If able to inject additional capital by the end of this week, AAX should be able to resume services as usual. If AAX is unable to secure funding, AAX is committed to initiate legal procedures to secure and ensure the distribution of assets. https://t.co/TfLj8w1Vr4 https://t.co/IVQjFWKBvU
— Wu Blockchain (@WuBlockchain) November 15, 2022
Before FTX collapsed, several crypto companies, including Celsius and Voyagers, had filed for bankruptcy protection. Most investors could not get their funds back due to limited consumer protection.
Senate Committee on Banking, Housing and Urban Affairs chief Sherrod Brown stressed the need to study how investors’ money had been mishandled in the FTX case.
He pointed out that the crypto exchange’s collapse proved that “cryptocurrencies can fail,” meaning that regulators must strategically decide on the crypto market’s role in the economy amid the turmoil.
Brad Sherman, head of the Subcommittee on Investor Protection and Capital Markets, discussed the Securities and Exchange Commission’s role in regulating the crypto market. He urged the SEC to take “decisive action” so the crypto industry could get out of the “regulatory gray area.”
Sherman also talked about campaign contributions and policy lobbying by high-profile crypto figures to “deter meaningful legislation.”
Sam Bankman-Fried, the former CEO of FTX, was known for his contribution to the Democrats’ campaign. He often flew to Washington to talk with regulators about the crypto industry.
Sources have reported that Bankman-Fried is still trying to raise funds to give the money back to the investors.