Economist and strategist Peter Schiff took Bitcoin’s (BTC) latest plunge to both reiterate his long-standing $20,000 price target for the cryptocurrency and to briefly outline the asset’s downward path.
Specifically, Schiff estimates that BTC has more room to fall after retracing 11.40% to $67,164 in the last week of trading, as ‘here is way too much complacency in Bitcoin for the market to be anywhere near a bottom.’
The X post implies the economist believes Bitcoin’s latest trajectory will take the cryptocurrency to and below $50,000, which is likely to prove a sufficient downward catalyst to rapidly reach $20,000.
Schiff speculated that such a crash could cause long-term holders and bulls ‘to finally throw in the towel,’ as their conviction breaks.
Does Schiff believe Bitcoin crash could trigger market-wide contagion?
In a separate yet related social media post, the economist also wondered if the latest moves in the cryptocurrency market would remain confined to the industry or lead to contagion across other risk assets, possibly turning into ‘a catalyst to drive investors into value and safety.’
Given Peter Schiff’s track record, ‘value and safety’ likely primarily refers to gold, and he, on June 2, unfavorably compared Bitcoin’s performance between 2021 and 2026 to the returns from other investments, including the yellow metal, silver, and stocks:
Bitcoin is below $69K, a peak first reached in Nov. 2021, nearly five years ago. However, during that time period the NASDAQ is up 73%, gold is up 138%, and silver is up 218%. Despite the unprecedented hype, Bitcoin investors missed out on huge gains in risk and safe-haven assets.
Why is Bitcoin price falling?
Elsewhere, it appears that Bitcoin’s most recent plunge is a direct result of Michael Saylor’s Strategy (NASDAQ: MSTR) selling some of its BTC for the first time since 2022 to cover its rising costs on other fronts.
For his part, the billionaire HODLer maintains his company has enough money to hold the world’s premier cryptocurrency indefinitely and regardless of market moves.
Another potential candidate for the risk-off sentiment among digital asset investors – and likely a supporting factor in the sell-off – is the recent rise in tension in the Middle East.
Despite numerous reports of a deal between the U.S. and Iran being ‘imminent,’ negotiations remain seemingly frozen, and the two countries have been increasingly exchanging blows.
If the geopolitical situation proves the more decisive factor than Saylor’s traders, Schiff’s speculation that Bitcoin might be a harbinger of a wider move among risk assets could prove correct.
The Strait of Hormuz remains effectively closed, and Exxon Mobil (NYSE: XOM) recently warned that oil inventories are approaching crisis levels.
Featured image via Shutterstock
