Trump Praises Bitcoin, Schiff Warns of Dollar Decline

Peter Schiff, a well-known economist and Bitcoin critic, has expressed strong opposition to Donald Trump's support for Bitcoin, warning that this endorsement could have detrimental effects on the US dollar and the broader economy. Schiff's concerns stem from the potential for increased Bitcoin adoption to place significant strain on the dollar, as more people and institutions convert their dollars into Bitcoin.

Schiff's critique comes just a day after Trump publicly praised Bitcoin for its positive impact on the US economy. During a White House press conference, Trump described the crypto industry as a powerful economic force that the nation cannot ignore. He highlighted the job creation and economic benefits that Bitcoin brings, noting that it could also alleviate pressure on the dollar. Trump's shift in stance on Bitcoin could mark a significant step towards the mainstream adoption of digital currencies in the American economy.

Schiff argues that the mass conversion of US dollars into Bitcoin weakens demand for the greenback, potentially leading to a loss of its monopoly as the world's reserve currency. This perspective contrasts sharply with Trump's view, who described Bitcoin as "amazing" and noted its ability to create jobs and outperform the stock market. The Trump administration has reportedly considered using seized assets to fund a Strategic Bitcoin Reserve, with several US states following suit by allocating capital to build their own Bitcoin reserves.

Trump's personal ties to the crypto industry have also grown stronger. Trump Media recently secured $2.3 billion through private placement to fund its Bitcoin treasury operations. Schiff, however, warns that converting US dollars from stock and note sales to Bitcoin carries significant financial risks. He also criticized Trump for using Bitcoin to raise campaign contributions, suggesting that Trump's enthusiasm for digital assets is a strategy to attract wealthy crypto donors as the next election season approaches.

Schiff's warnings come amid a backdrop of growing crypto frenzy, with the World Liberty Financial (WLFI) company associated with Trump recently receiving $100 million backing to promote its decentralized finance (DeFi) efforts. The Trump family's adoption of Bitcoin is reportedly due to being debanked from traditional financial institutions. As Trump continues to embrace crypto both politically and personally, Schiff's concerns highlight the growing divide between Bitcoin advocates and traditional economists.