Quoth the Raven #329 - The Bitcoin Debate: Peter Schiff vs. Larry Lepard
Jan 24, 2024
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Peter Schiff and Lawrence Lepard engage in a lively debate on Bitcoin and its properties as a form of money. They discuss the differences and similarities between Bitcoin and gold, exploring the risks associated with Bitcoin and the enduring value of gold. The conversation also touches on the potential impact of mining gold in space and how it could affect the supply and demand of gold. Lastly, they discuss the potential effects of Bitcoin on the demand for gold stocks and its impact on gold mining companies.
Bitcoin offers unique properties such as immutability and digital scarcity, making it a valuable form of intangible money.
The future of Bitcoin is dependent on continued user adoption and belief in its potential as a savings technology, with risks including technological failure, loss of interest or adoption, and government intervention.
Bitcoin has potential to be used as a payment solution with the Lightning Network offering faster and cheaper transactions, although widespread adoption is still a challenge.
Both Peter Schiff and Larry LeBard have positive outlooks for gold, but have differing views on Bitcoin's 2024 performance, with Schiff predicting a breakout for gold and LeBard expecting Bitcoin to reach 100 Bitcoin by April 2024.
Deep dives
Bitcoin's value as a form of money
Bitcoin is seen as a form of money, with supporters arguing that money is a social obligation and not necessarily connected to physical properties. They believe that money can be intangible and still have value, and Bitcoin offers unique properties such as immutability and digital scarcity.
Risks to Bitcoin's adoption and value
While Bitcoin continues to gain adoption and user numbers grow, there are risks that could impact its value. These include a technological failure, loss of interest and adoption, or government intervention in the form of regulation or outlawing it. The future of Bitcoin is dependent on continued user adoption and belief in its potential as a savings technology.
Bitcoin's potential as a payment solution
Bitcoin, while not widely used for everyday transactions yet, has potential to be used as a payment solution. Although transaction costs at the base layer can be high, the Lightning Network provides a layer two solution with lower fees for faster and cheaper transactions. Adoption of Bitcoin for payments is growing, but it still has a long way to go to become a widely accepted payment method.
Possible downfall of Bitcoin
If adoption slows or the number of new buyers decreases significantly, Bitcoin's value could come under pressure. Additionally, government intervention and regulatory changes could pose risks to its future. If people lose faith in the asset and begin to sell, without new buyers stepping in, the price could decline. However, Bitcoin's continued growth and adoption suggest that it has resilience and will likely continue to attract new users and investors.
Gold and Bitcoin Price Targets for 2024
According to Peter Schiff, the sentiment for gold is bleak, with even true believers struggling to stay positive. However, he believes gold is near the floor and anticipates a breakout. He predicts that gold will be between $2,500 and $3,000 at the end of 2024. Additionally, Schiff expects gold mining stocks to rise by 50% to 100%. On the other hand, Larry LeBard agrees that sentiment for gold is terrible, but he also believes sentiment for Bitcoin is overly optimistic. Despite this, he expects Bitcoin to reach 100 Bitcoin by April 2024 due to the halving and increased adoption. He acknowledges the need for a correction in Bitcoin sentiment and suggests that new money may flow into the cryptocurrency once ETF options become more accessible. However, he also notes the potential for increased regulation and warns of the need to cool down Bitcoin sentiment. So, while both Schiff and LeBard have positive outlooks for gold, they have differing views on Bitcoin's 2024 performance.
Factors Influencing Gold and Bitcoin
Peter Schiff highlights the belief that the Federal Reserve will ease monetary policy and return to quantitative easing, which he suggests will benefit gold. He also points out that increased inflation is driving up the cost of mining, yet gold prices have not reflected this. Schiff believes that once the market realizes the reality of inflation, gold will rise in value. Similarly, Larry LeBard emphasizes the need for gold and Bitcoin to factor in rising inflation due to government finances. He expects both assets to perform well, with gold benefiting from revaluing due to future inflation and its use as money. Meanwhile, he believes Bitcoin's adoption curve and the halving will drive its value up, despite acknowledging the need for a sentiment correction.
Contrarian Views and Risks
Peter Schiff and Larry LeBard highlight the contrarian sentiment towards gold and gold mining stocks, indicating potential buying opportunities. Both suggest that sentiment is overly optimistic for Bitcoin, posing risks for a potential sell-off or cooling of sentiment. Schiff argues that the launch of ETFs may not generate the expected demand, and additional regulations by the Biden administration could impact sentiment further. LeBard raises concerns about the potential bubble in Bitcoin and the risks associated with mining asteroids or advancements in supercomputing. While both forecast positive outcomes for gold, they acknowledge the need for sentiment shifts in Bitcoin and highlight potential risks ahead.
All podcast content is subject to this disclaimer.
Chris is not an investment adviser. Listeners should always speak to their personal financial advisers. Please leave me alone.
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