Bitcoin’s FOMO rally to $11,000 seems to be cooling off considering the current scenario of BTC prices. While some people predict a higher high formation, others expect a correction and retest of the lows. Others like Peter Schiff are on a different page as Schiff warned that Bitcoin prices will eventually tank, causing a wipeout of paper gains.
Schiff’s theory is such that no matter how high Bitcoin’s price rises people would have to sell BTC to get their profits.
It doesn't matter how high the price of Bitcoin rises unless you sell. Every buyer must eventually sell to realize any benefit from the rise. But therein lies the problem. Once hodlers decide to cash out, the price collapses, wiping out paper gains before they can be realized!
— Peter Schiff (@PeterSchiff) June 22, 2019
The problem would be when the HODLers, who have been holding Bitcoin for a very long time, decide to sell their position to take profits. According to Schiff, this would cause a massive sell-off causing Bitcoin’s prices to tank hard.
As logical as the above statement seems, the same is true for almost every asset that is traded. Erik Voorhees, a prominent Bitcoin enthusiast questioned the fallacy in this logic as he tweeted:
“And this is not true for gold because…?”
Voorhees’ question puts Schiff’s theory to rest and that is how trading works, there are always buyers and sellers who are pushing the price either way. With Bitcoin, the sentiment of the people Hhas been positive
Jameson Lopp tweeted:
One day you'll realize that you just described every tradable asset, ever.
— Jameson Lopp (@lopp) June 22, 2019
Schiff cleared the air as he explained that other assets like stocks paid dividends, bonds paid interest, real estate paid rents, and that each of these previously-mentioned assets had a potential for income but Bitcoin didn’t.
“No it’s not. Stocks pay dividends, bonds pay interest, real estate pays rents. It’s the income potential that gives investment assets their value. Commodities derive their value from finale use or consumption. Bitcoin pays nothing and can neither be used nor consumed.”
There might some truth to Schiff’s above comment as there are always buyers for Gold at any given price, since it is a store of value known to mankind for over a century. However, Bitcoin is challenging Gold as a store value and there have been uses cases emerge over the years, and solutions for scalability.
Bitcoin, in 2019, has gathered more mainstream attention than ever before and it doesn’t look like Bitcoin HODLers will lose confidence in Bitcoin and start dumping anytime soon.
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