Peter Schiff: Bitcoin Failed ‘Digital Gold’ Test, Higher Yields Could Hurt BTC

Longtime Bitcoin critic Peter Schiff sees persistently high inflation driving Treasury yields substantially higher, which could create pressure on stocks and cryptocurrencies while strengthening the case for gold.

Gold Vs. Bitcoin Debate Heats Up

Schiff argued in an interview with Bitcoin Magazine on Sept. 16. that higher inflation ultimately strengthens gold’s investment case, even if expectations for Fed tightening create short-term volatility.

Gold has rebounded 2.4% following the Fed decision as traders reassess the outlook for inflation, interest rates and the dollar.  

Bitcoin (CRYPTO: BTC), Schiff contended, has failed to behave like “digital gold” and should increasingly be measured against gold rather than simply against the U.S. dollar.

He maintained his long-held view that the cryptocurrency lacks the underlying value that gives gold its monetary properties.

Why Higher Yields Could Hit BTC

Schiff warned that persistently higher Treasury yields could pressure Bitcoin by making lower-risk assets more attractive and tightening financial conditions.

With the 10-year Treasury yield hovering around 5%, Schiff said yields could eventually climb above 6% if inflation remains elevated.

A rate-driven stock market sell-off would be “very bearish” for Bitcoin and the broader crypto market and higher borrowing costs and tighter liquidity could further weigh on speculative assets.

While Bitcoin has absorbed the Fed’s latest hike relatively well, Schiff cautioned that BTC may not digest further rate increases as well.

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