Bitcoin's Newest Merchant Peter Schiff: Gold Still Better Than BTC

Famed finance personality Peter Schiff's precious metals company now takes bitcoin, but he remains skeptical about digital currencies.

May 21, 2014 at 10:10 p.m. UTC
Updated Sep 14, 2021 at 2:07 p.m. UTC

Euro Pacific Precious Metals, one the world's largest gold and silver dealers by volume, announced today that it is accepting bitcoin through merchant bitcoin processor BitPay.

Founded by famed financial personality Peter Schiff — host of popular financial radio show "The Peter Schiff Show" and a vocal detractor of bitcoin, the company's decision unsurprisingly reverberated throughout the bitcoin community, with many optimistic that Schiff had reversed his stance on digital currency.

However, in an interview with CoinDesk, Schiff framed his company's move as more strategic to its business goals than supportive of bitcoin itself.

Schiff told CoinDesk that his decision to accept bitcoin does not represent an about-face on his views, and that, for the moment at least, cashing in on bitcoin is simply good business, stating:

"Chances are your average bitcoin holder is more likely to be a precious metal buyer than a person who doesn't own bitcoin. [...] I think it makes sense to target bitcoin holders as customers."

Schiff reiterated that he's still "a skeptic of bitcoin and other alternative currencies", and that the move is aimed in part at capturing customers who may also be worried about the ability of bitcoin's price to rise in light of recent negative developments in the space.

Prices will go down

Schiff told CoinDesk that he personally believes the price of bitcoin will decline, and that investors would be smart to turn some of their bitcoin into gold or silver.

For example, he noted how the collapse of Mt. Gox and bitcoin's subsequent decline in value have not only created negative market sentiment, but also a compelling case that investors should diversify their assets:

"There might be some people getting nervous about where the price is going to go. What if it goes down to $100 or lower? Maybe it will, people can take some risk off the table by buying some gold or silver."

Further, Schiff is quick to note that he believes silver is the better buy, given that he projects it to rise from its current value of $19 to as much as $50.

He regrets not buying bitcoin

Given that Schiff was aware of the currency as far back as early 2013, he understandably regrets he didn't capitalize on bitcoin's rise in value, but said that this doesn't have any impact on his outlook for digital currencies, explaining:

"Obviously, I could've bought them then and could've done pretty well, sure. I regret not buying a bunch of them, but that doesn't mean I'm going to buy them now."

He continued, explaining that his company is unlikely to hold any of the bitcoin it accepts, adding: "We're not accepting bitcoin, we're accepting dollars. BitPay is accepting bitcoins".

One reason is that he says he's unable to differentiate between bitcoin and the many available altcoins on the market, saying:

"I still don't feel that any of these digital currencies are likely to survive long term. Is it possible that some may? But, then how do you know what one?"

He's considered launching his own currency

Despite the fact that he is bearish on bitcoin's potential, Schiff told CoinDesk that he has also considered a digital currency project, similar to the one adopted by NoFiatCoin — using gold and silver to back the coin.

However, he says his uncertainty about the process ultimately led him to abandon the idea:

"I thought it would be very expensive to do it and I didn't know how much money I could make, because I'd have to back it by gold and I couldn't really mark it up that much."

Still, Schiff seemed to suggest that he sees a potential application for bitcoin as a technology, even if he believes the currency is not a great investment, stating that governments could launch asset-backed digital currencies in the future.

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