Leading economist criticizes Bitcoin promoters for attributing BTCs decline to Mt Gox
Bitcoin (BTC) has recently seen short-term gains but remains pressured due to ongoing capital outflows. The primary reason for this downturn is believed to be the influx of BTC from the Mt. Gox repayments, a situation that has stirred significant debate.
American economist and cryptocurrency skeptic Peter Schiff criticized Bitcoin enthusiasts in a recent post on July 6. He argued against attributing Bitcoin’s price slump solely to the Mt. Gox creditor repayments. According to Schiff, this explanation oversimplifies the issue and diverts attention from a more critical concern within the cryptocurrency market: the lack of genuine institutional demand for Bitcoin.
Schiff highlighted that the current sell-off indicates a substantial absence of institutional interest in Bitcoin. He suggested that if institutional demand truly existed as claimed by proponents, institutional buyers would have eagerly seized the opportunity to acquire Mt. Gox’s Bitcoins through off-market transactions, thereby minimizing any negative impact on prices.
In addition to the Mt. Gox repayments, some market observers have pointed to Germany’s decision to sell Bitcoin as contributing to the recent slump. However, Schiff dismissed this impact, stating that if institutions were genuinely committed to the crypto sector long-term, such government actions would have negligible effect.
Schiff’s comments come amidst ongoing debates about institutional demand for Bitcoin, which some argue remains robust. Recent developments include major financial institutions entering the cryptocurrency space through spot exchange-traded funds (ETFs). Despite these developments, Schiff, a persistent critic of Bitcoin, continues to caution against its perceived lack of intrinsic value and susceptibility to speculative bubbles and market manipulation.
The Mt. Gox repayment process, long-awaited by creditors since the exchange’s infamous 2014 bankruptcy due to a massive hack resulting in the loss of 850,000 Bitcoins, has been identified by many in the cryptocurrency community as a key driver of recent Bitcoin price movements. Currently valued at nearly $9 billion, the repayment process has already involved the sale and distribution of approximately 50,000 BTC.
Despite the current bearish sentiment, Schiff predicts that the Bitcoin sell-off could intensify further. He emphasized that anyone buying Bitcoin ETFs below the $38,000 mark is likely to incur losses, reinforcing his long-standing skepticism towards the cryptocurrency.
Meanwhile, Bitcoin aims to maintain its recent gains above the critical support level of $57,000. At the time of writing, Bitcoin showed a nearly 2.5% increase over the past 24 hours, trading at $57,083.