Last week Scott Melker interviewed Peter on The Wolf of All Streets podcast. They have a friendly discussion about Bitcoin’s future, the differences between gold and crypto, and the overlap in the crypto and precious metals movements.
Peter and Scott start by highlighting points of agreement between Bitcoiners and goldbugs. Referencing long-term Bitcoin advocates, Peter says,
“They’re there for the philosophical reasons. They’re free-market libertarian. They understand these macro issues. I think there’s a lot of common ground there. But I think that a lot of people who have bought Bitcoin over the last few years really are not that into the macro. I mean, they kind of just bought it. It was going up and they kind of jumped on the bandwagon. And so there’s a lot of people that own Bitcoin— it’s not really about the fundamentals.”
As they move into their disagreements, Peter sums up his thoughts on gold as an asset class:
“I don’t tell people to only own gold. I don’t even consider gold an investment. I consider it an alternative form of savings. If you don’t want to invest some of your money, if you don’t want to buy stocks, if you don’t want to buy real estate, if you want some dry powder, where do you keep it? Now most people would keep it in dollars or euros or pounds, depending on where they live. But I think that you’re better off keeping it in gold. I think that gold is going to do a much better job of retaining its purchasing power over time than any of those fiat currencies.”
The fundamental question, says Peter, is whether people value Bitcoin beyond pure speculation:
“Bitcoin doesn’t have any actual use. There’s nothing you can do with your Bitcoin. There’s no value there that you can store, because you can’t do anything with it today. So you won’t be able to do anything with it 100 years from now. Yeah, you can sell your Bitcoin to somebody, but that’s totally different. Just because somebody is willing to buy Bitcoin doesn’t mean that Bitcoin has any underlying value.”
Peter questions the viability of mining Bitcoin, given the industry’s high exposure to price risk:
“I think the business models are extremely risky, given what could potentially happen to the price of Bitcoin and the cost of mining it. I mean, the price could go down and it could cost them more to mine it. Even when Bitcoin was rallying up to 74,000 and making a new high, the Bitcoin miners were getting killed.”
Scott asks Peter, why do foreign central banks need to buy gold, and why have their purchases increased so much recently? In his answer, Peter gives a promising outlook for the yellow metal:
“I think the reason the central banks are adding it is because they can read the writing on the wall with respect to the problems for the dollar because the dollar is their primary reserve asset. But the problem is it’s a liability of the world’s biggest debtor nation, and our debt is exploding exponentially. We’re almost at a $35 trillion national debt. We’re now spending more than a trillion a year just on interest on that debt.”
Bitcoin may actually be harming the sound money movement, insofar as it draws attention from gold and may discredit decentralized money:
“I really think you guys are missing the point. You should be advocating for sound money, for a return to gold, because that is the solution that we need. That’s the monetary solution to rein in excess government spending and to have the politicians honest. … And to the extent that the Bitcoin community is detracting from that, it’s causing people to move into Bitcoin or other crypto tokens instead of gold.”
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