Well-known economist Peter Schiff said on Wednesday that the government’s decision to create a Bitcoin BTC/USD strategic reserve would end up damaging the U.S. dollar while benefiting gold.

What happened: Schiff took to X to express his dissatisfaction with President Donald Trump’s recently announced strategic cryptocurrency reserve, which will have a special status for Bitcoin.

Schiff argued that if Bitcoin is viewed as a hedge against fiat currency debasement, the Bitcoin strategic reserve will only “accelerate” the dollar’s downfall.

The staunch Bitcoin critic said the “foolish” move could benefit Bitcoin in the short run, but the “ultimate winner” will be gold, arguably considered the best hedge against currencies’ depreciation value.

See Also: El Salvador’s Nayib Bukele Defiant Amid IMF’s Bitcoin Accumulation Concerns: ‘It Won’t Stop Now, And It Won’t Stop In The Future’

Critics shot back, with a widely followed X user, going by the pseudonym Teddy Bitcoins, argued that Bitcoin, like gold, possessed a “massive” monetary premium, and both stand to gain if the dollar falls.

“This doesn't mean [Bitcoin’s] success will cause the demise of the dollar,” the user said.

Why It Matters: Schiff has been severely dismissive of the idea of a Bitcoin reserve. In November 2024, he warned that the government would have to print more dollars to buy additional Bitcoin, which could spiral into hyperinflation and severely devalue the dollar.

However,  Sen. Cynthia Lummis (R-Wy.), who introduced a Bitcoin reserve legislation last year, has maintained that the proposal wouldn’t require new taxpayer dollars. Instead, the government could leverage its existing resources, particularly gold certificates held at the Federal Reserve’s 12 banks.

Price Action: At the time of writing, Bitcoin was exchanging hands at $91,542.13, up 4.43% in the last 24 hours, according to data from Benzinga Pro. Spot gold traded at $2,923.44 per ounce as of this writing, after registering an all-time high of $2,956 last month.

Image via Shutterstock

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