Schiff w/ Chasse: Bitcoin is a Risky Asset

In a recent interview with Kyle Chasse, Peter walks listeners through a warning many sound-money advocates have been making for years: the next big price reset may not look dramatic in dollar terms, but in other terms it could be devastating. He connects the rising price of gold, the shift by foreign central banks away from the dollar, and the fragile footing of Bitcoin to the same fundamental economic problem: unsound money.

He starts by explaining why the next big market collapse might look mild in dollar terms but catastrophic once you price assets in sound money — gold — and why nominal stock indices can hide massive real losses:

We’re not going to have a Great Depression style crash because we’re not on a gold standard anymore like we were during the Great Depression. But I think that if you measure the price of stocks in terms of gold, we could absolutely see a decline of that magnitude, which is just something like a 90 percent decline in the value of stocks. Now, look, stocks are down 70% priced in gold already if you go back to the year 2000. So, you know, we’re already seeing this major decline in the real value of U.S. stocks; it’s just that, you know, the nominal price doesn’t go down because we keep printing dollars.

He then links that valuation problem to where real money is currently flowing, arguing foreign central banks are increasingly buying gold instead of holding dollars or Treasuries:

A lot of it is foreign central banks that have been buying. And so those would include BRICS central banks. But it’s clear that the world is moving away from the dollar. And so if they’re moving away from the dollar, they have to be moving towards something else, and what they are moving to is gold. Gold is the beneficiary of these flows out of the U.S. dollar.

Putting the flows into context, Peter frames this as part of a larger global shift — de-dollarization — that he sees as the next major monetary reset with wide implications for U.S. policy and markets:

The world stayed on the dollar standard, even though the U.S. was no longer on the gold standard. The world stayed on this dollar standard and they’re still on it, but they are in the process of getting off of it. And that’s going to be the next major monetary reset in the world.

From there he turns to crypto and draws a sharp contrast. Far from behaving like an insurance policy against fiat debasement, Bitcoin has mostly traded like a speculative risk asset — and that matters for investors looking for true safe havens:

There is no indication that that’s going to be the case because Bitcoin up until today has traded like a risk asset, not like a safe-haven asset. If anything, it’s negatively correlated with gold. So something that is necessarily good for gold is not necessarily good for Bitcoin; in fact, I would say it’s the opposite. I mean, the worst thing, or one of the worst things, that can happen to Bitcoin is gold keeps going up, silver keeps going up, because one of the reasons that Bitcoin was able to do so well was gold and silver were not going anywhere.

He also raises a practical risk within the Bitcoin ecosystem: leverage. Long-term holders who borrowed against earlier, low-cost positions may be forced to liquidate at precisely the wrong moment, intensifying downside pressure:

I’m talking about people who bought ten years ago or longer who bought Bitcoin sub 10,000 or sub 1,000, and so they had big gains. … I think a significant number of those people borrowed against their Bitcoin, and so I think that there’s a lot of Bitcoin out there that has collateralized loans. And I think that in these circumstances, those Bitcoiners are going to have no choice. That Bitcoin is going to get sold, and it’s going to get sold at a very inopportune time.

He closes with a specific forecast for precious metals. He reiterates a bullish target for gold and silver and cautions that a true dollar crisis would push prices even higher:

Well, you know, I’ve been saying I think gold’s going to at least hit 5,000 by next year, which isn’t even that crazy when it’s at forty-two hundred and change right now, but at least 5,000, maybe 6,000 next year. And I’ve been saying one hundred dollars silver, and we’re getting closer and closer to one hundred even before we get into 2026. But it’s always possible that the prices could be a lot higher if we have a real dollar crisis.