Community Trust ScoreVerified
Peter Schiff: With food and energy prices soaring, many Bitcoin HODLers will be forced to sell to cover the cost. Grocery stores and gas stations don’t accept Bitcoin. When Bitcoin crashed during Covid no one needed to sell. Consumer prices were much lower and HODLers got stimulus checks.
The need to sell Bitcoin to pay the bills will only get worse as the recession deepens and many HODLers lose their jobs, especially those working for soon-to-be-bankrupt blockchain companies. If circumstances change, long-term buyers without paychecks will be forced to sell.
Community Reaction: To invest in Bitcoin, you have to do so with your spare cash or excess cash. Those who need to sell their Bitcoin to buy groceries or gas are not Bitcoin investors. Being a bitcoin investor, you first need to understand the asset. Those who do know that Bitcoin is long-term would not worry about selling.
Counter opinion to understanding Bitcoin as an asset: Some may have originally bought Bitcoin with the intention of holding it long term, but circumstances change. Now they may need the money, so they have to sell. This problem will increase during the next recession as Bitcoin HODLers lose their jobs.
Clarification on assets and Bitcoin: Just like Bitcoin is an asset type, gold and other kinds of investments are assets, which people want to liquidate when they need cash for everyday spends. Bitcoin is not an exception. People hold assets to grow wealth and to liquidate it at the time of their need. So, bitcoin bashing citing the need to spend does not make sense.
Those who do not have jobs to cover for expenses should not invest in Bitcoin. If you do invest in BTC, you need to accept the value you get when liquidating BTC. Every kind of investment comes with inherent risk. So does bitcoin. The basics of investment is that you should not invest the money that you have for food and gas in BTC.
Criticism: It’s hard to be convinced that Bitcoin will hold its value during a crisis. Bitcoin value is built on capricious faith, more like Dogecoin.
Analogy to Holding Bitcoin: The growth of a large business is merely a survival of the fittest. The American Beauty rose can be produced in the splendor and fragrance, which brings cheer to its beholder only by sacrificing the early buds, which grow up around it.
