Euro Pacific Capital chief economist and strategist Peter Schiff suggested cryptocurrency investors are “fools” Monday after bitcoin took a major dip in the market after reaching record-breaking highs against the dollar.
“All bitcoin is is the latest iteration of fool’s gold and anybody buying it is ultimately a fool,” Schiff told FOX Business' "Making Money with Charles Payne."
Schiff explained that bitcoin investors who were able to sell after the stock’s recent joyride are merely selling to other buyers who don’t recognize it’s all a “scheme.” However, he added, most people who don’t sell are “under the delusion” that bitcoin will someday turn to cash.
“It’s never going to be money,” he said. “It doesn’t fit the very definition of money. Money needs to be a commodity. It needs to have actual value unto itself, not just the uses and means of exchange.”
The economist likened bitcoin to fiat digital currency that’s “backed by nothing” and, moreover, is not legally recognized.
“People who are buying it are going to wake up one day and they’re just going to be a bagholder,” he concluded.
The cryptocurrency reached a record value of $40,797 per coin on Thursday, helping fuel the market capitalization for all digital coins to above $1 trillion for the first time. Bitcoin was trading down 5.14% at $33,519 per coin on Monday afternoon after reaching a session low of $30,568.
FOX Business’ Jonathan Garber contributed to this report.