Peter Schiff says bitcoin is not an inflation hedge; gold and silver are alternatives

Peter Schiff, known as a bitcoin critic, again argued that bitcoin is not a real asset and cannot be compared with traditional assets such as gold, equities or real estate.

On Aug. 30, blockchain media outlet U.Today reported that Schiff recently directly rebutted crypto analyst Quinten Francois' claim comparing bitcoin's market value.

The debate began with a comparison of the size of asset classes. Francois said the gold market is about 20 times larger than bitcoin, global equities about 100 times larger, and global real estate more than 250 times larger. The remark can be read as meaning bitcoin still has substantial room to grow, but Schiff rejected the comparison itself.

Schiff drew a line, saying the comparison does not hold. He wrote, "Bitcoin is not a real asset, so its value has no relationship to gold, equities or real estate." He also asked the other side, "Why can't you understand that?"

The criticism extended to the argument that bitcoin hedges inflation. Schiff said he could not agree with the claim that bitcoin should be chosen as a way to protect against rising prices. He acknowledged some investors see it that way, but said that judgment is wrong.

Instead, Schiff pointed to traditional precious metals as an inflation hedge. He argued it is the wrong choice to pick bitcoin instead of gold or silver. He reaffirmed his long-held view that bitcoin can be valued based on expectations and preferences within the digital asset market, but is difficult to see as a defensive asset in an inflationary environment.