Economist Peter Schiff called Bitcoin (CRYPTO: BTC) a “fake asset” on Sunday, distinguishing it from risk-off technology stocks.
A Rotation From Fake To Real Assets, Says Schiff
In an X post, Schiff said Bitcoin’s ongoing slump isn't due to its risk-off sentiment, but rather to its lack of intrinsic value.
“Bitcoin isn't selling off because it's a risk asset, but because it's a fake asset,” Schiff argued.
The Bitcoin critic noted that the Nasdaq Composite, considered a barometer for tech stocks on Wall Street, is less than 2% off its record close, while Bitcoin is more than 28%.
“This shows that there's more than just risk-off at play. This is a rotation from fake to real assets,” he added.
See Also: Bitcoin’s ‘Four-Year Cycle’ Isn’t Broken — It Was Never Real And The Data Finally Proves It
A U-Turn?
Schiff’s latest remarks are a departure from his previous stance, where he likened Bitcoin to a “digital tech stock” with no earnings potential. He had argued that Bitcoin’s price movements were highly correlated with those of technology stocks, despite it not being an “operating business” with revenue and earnings.
Interestingly, Bitcoin’s correlation with the Nasdaq Composite has increased lately, with the correlation coefficient rising from 0.12 to 0.40 in November, according to data from TradingView.
| Cryptocurrency | All-Time High Price | Price (Recorded on Dec. 1, 2020) | Price (Recorded at 12:30 a.m. ET) | Gains Since Record Highs +/- | 5-Year Gains +/- |
| Bitcoin | $126,198.07 | $19,633.77 | $85,897.10 | -31.97% | +337.497% |
| Nasdaq Composite | 23,958.47 | 12,313.36 | 23,365.69 | -2.4% | +89.75% |
Another factor to consider is that, while Bitcoin has faltered recently, its gains over the last five years have considerably surpassed those of the Nasdaq composite.
Schiff Continues To Be Skeptical
Schiff’s comments come amid a broader debate on the viability of cryptocurrencies as long-term investments. He warned last week that companies using Bitcoin or Ethereum (CRYPTO: ETH) for their corporate treasury strategies are “ultimately doomed.”
He compared the current cryptocurrency landscape to past speculative bubbles, arguing that the digital-asset boom is larger than the dot-com mania and “built on nothing.”
Photo by Frame Stock Footage via Shutterstock
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