Economist Peter Schiff is sounding the alarm over the state of cryptocurrencies amid global market turbulence triggered by President Donald Trump’s new tariff policies. Schiff, a long-time critic of Bitcoin, claims the digital assets are beginning to crack under the weight of these new trade measures, with some crypto prices taking a significant hit.
Schiff Critiques Trump’s Tariffs and Bitcoin Strategy
Peter Schiff didn’t mince words when he referred to Trump’s recent tariff decisions as some of the “stupidest” actions taken by the president. Schiff’s harsh critique also targeted Trump’s idea of creating a strategic Bitcoin reserve, which he had previously deemed a bad move. Now, he believes that the tariffs have compounded the issues facing digital currencies.
The market initially reacted with some optimism, with early signals suggesting that cryptocurrencies might weather the storm. However, by the end of the day on Friday, Bitcoin had fallen 5.6%, trading at $78,769. This marked a 27% drop from its historic high of $108,786 on January 20, according to CoinGecko. Meanwhile, Ethereum saw an even steeper decline, falling by 12% to $1,591, a drop of over 67% from its peak in November 2021.
Global Markets Tumble as Tariffs Bite
The cryptocurrency sell-off coincided with a broader downturn in global markets. Futures contracts for U.S. stocks slid on Sunday evening, signaling that Monday’s market opening would likely be volatile. In Asia, Japan’s Nikkei 225 plunged 8.9%, while Taiwan’s Taiex index dropped nearly 10%. This fall triggered shutdowns for major companies like TSMC and Foxconn.
In addition to stock market losses, the cryptocurrency market also saw a sharp rise in liquidations. Over $892 million worth of positions were liquidated within 24 hours, including $300 million in Bitcoin-related trades, according to CoinGlass data.
Trump’s Coin Declines Along with Market Woes
Schiff also highlighted the performance of the Trump coin, which was launched earlier this year. The token, which was intended to be a piece of political memorabilia, saw a significant drop of 13.6% on the same day, now trading at just $7.93—a staggering 89.1% decline from its peak of $73.43 on January 19.
For Schiff, this sharp decline in both Bitcoin and Trump’s token reflects deeper vulnerabilities in the cryptocurrency space. While Schiff remains highly critical of digital assets, he’s also concerned about the broader implications of Trump’s trade policies on markets, including the cryptocurrency industry.
Schiff Questions Crypto Leaders’ Support for Trump’s Trade Policies
Schiff’s skepticism extends beyond the cryptocurrency markets to the leaders who support the president’s trade policies. He raised the possibility that these figures in the crypto industry may either be naïve or driven by self-interest. Schiff speculated, “There are three possible explanations: 1) Are they really this foolish? 2) Are they supporting Trump to ensure his favor? 3) Do they believe that the economic harm will actually benefit Bitcoin?”
Schiff has long criticized the notion of government involvement in the crypto market, including the idea of a strategic Bitcoin reserve. He fears that aligning Trump’s policies with the cryptocurrency space could lead to widespread losses for individual investors, especially those who have put their faith in digital currencies during this turbulent period.
A Difficult Road Ahead for Crypto Investors
As the market continues to react to Trump’s tariffs and trade wars, Schiff’s concerns may resonate more widely with investors, particularly those in the cryptocurrency market. With Bitcoin and other cryptocurrencies increasingly feeling the pressure of economic disruptions, many are beginning to question the stability of digital assets as a safe-haven investment.
For crypto enthusiasts and investors alike, the future remains uncertain. The latest turmoil serves as a reminder of how deeply intertwined global markets are and how sensitive they are to government policies and geopolitical tensions. Whether the market can recover or if this is the start of a longer-term decline will depend heavily on the decisions made by both government officials and the crypto community in the coming months.
